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10 Gov4Dev blog posts from 2017 you don't want to miss!

Ravi Kumar's picture
It’s that time of the year when we look at the blogs we have published over the last 12 months and curate some of the most insightful pieces for you to read.

We also want to thank you for reading, contributing and engaging on what it will take to help governments build capable, efficient, open, inclusive and accountable institutions.

Can “Resource Financed Infrastructure” Fix the Natural Resource Curse?

Håvard Halland's picture
Resource Financed Infrastructure
Source: Getty Images/Sam Edwards.
 

In Africa, estimates indicate that an annual investment of $93 billion is required to address the continent’s basic infrastructure needs – more than double the current level of investment.

The lack of productive investment of resource revenues, with spending of these revenues often heavily tilted towards consumption, is a critical component of the so-called resource curse, the observation that countries rich in natural resources frequently have slow long-term growth. Following oil or mineral discoveries, as the expectation of increased wealth spreads, pressures to spend typically become hard for politicians to resist, public sector salaries go through the roof, wasteful spending increases, corruption may flourish, hidden foreign bank accounts may be established, and the number of unproductive “white elephant” projects grows.

How can resource-rich countries ensure that a large share of oil, gas, and mining revenues are used for productive investment rather than excessive or wasteful consumption?