Published on Africa Can End Poverty

Transfer mineral revenues directly to citizens—and avoid the resource curse

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My colleague Marcelo Giugale and I have an Op-Ed in today’s Guardian online advocating the direct transfer of mineral revenues to citizens. 

Mineral revenues typically go from the extracting company to the government without passing through the hands of citizens.  As a result, citizens do not scrutinize the expenditure out of these revenues as much as they would if it were financed by tax revenues.  The net result is misallocation of public spending, slower growth and even slower poverty reduction in many of these mineral-rich countries, such as Cameroon or Nigeria. 

We propose that all or part of the revenues be transferred directly to citizens, so they can decide how it is spent.  If the government needs money for public goods, such as bridges, roads, clinics and schools, they can tax citizens.  Citizens might then scrutinize public spending more, since it is their taxpayer money. 

Furthermore, the technology to transfer money in this way is already here—debit cards with biometric information cost only a few dollars; the money can also be transferred by cell phone.

Pie in the sky or an idea worth pursuing—especially in the “new” oil producers such as Ghana, Uganda and South Sudan?  Let the debate begin…


Shanta Devarajan

Teaching Professor of the Practice Chair, International Development Concentration, Georgetown University

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