Avoiding the resource curse

Traders in the Ghanaian Stock Exchange World Bank Photo Collection

By Elly Jupp, Research Associate, IISS-Middle East

Today Economist readers voted in the newspaper’s latest debate that Africa’s rise is real. But the margin was ‘surprisingly narrow’. This is a resource-rich continent where economic growth has often been hampered by corruption and poor governance. Indeed, countries such as the Democratic Republic of the Congo, Nigeria and Uganda have all at times faced what is commonly called ‘the resource curse’, where the discovery and sale of oil or valuable minerals benefits only a small percentage of the population, and dominates the economy to the detriment of other industries.

In such situations, an influx of foreign investments can push up the value of the local currency, making other exports uncompetitive and depressing the wider economy. The jobs created for local people in resource-extraction tend to be relatively few and low-skilled, with the processing and manufacturing of the raw product moved abroad. Exporters are also vulnerable to the vagaries of the commodities markets, whose violent price swings affect the poorest hardest and make growth unsustainable. Sometimes the profits from commodities simply disappear into the pockets of kleptocratic regimes.

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Tracking weapons flows in Africa

By Jessica Delaney, Assistant editor, Strategic Comments

Weapons are flowing across the Sahel from Libya, and from Iran and China to countries such as Sudan, as a new form of arms trade takes shape in Africa. Speaking at the IISS recently, expert James Bevan explained that a predominantly ‘home-grown’ illicit trade had arisen, in which weapons were passed from governments to rebel groups, stolen from armed forces or trafficked by individuals as states collapsed.

This was a very different picture from that during the 1990s and early twenty-first century, when failing Eastern European states supplied cash-rich warlords involved in conflicts in Liberia and Sierra Leone. Libya joined the emerging hubs of weapons sales after the collapse of Muammar Gadhafi’s regime in 2011. Other hubs included the Eritrean capital, Asmara, and the Sudanese capital, Khartoum.

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Ghana, Africa and the Arab Spring

By Virginia Comolli, Research Analyst

‘This can be Africa’s century,’ Ghanaian presidential candidate Nana Akufo-Addo told the audience at the fifth IISS Oppenheimer Lecture. A former Ghanaian attorney general and foreign minister, he was speaking on the future of democracy in Africa and the impact of the Arab Spring. But he also took the time to point out that the continent had the world’s second fastest economic growth after Asia, and that strengthening trade and ties across the continent could assist Africa’s self-empowerment.

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Saving Somalia

Somali PM Abdiweli Mohamed AliBy Hanna Ucko Neill, Global Conflicts Analyst

On the eve of today’s London conference on Somalia, the country’s prime minister, Dr Abdiweli Mohamed Ali, laid out at IISS his vision for a secure, stable and prosperous Somalia. Without a functioning national government since 1991, the country has become a haven for pirates and al-Shabaab Islamist insurgents. However, the Western-backed transitional government in Mogadishu hopes to take advantage of several recent changes on the ground to consolidate a working federal state.

The prime minister admitted it was an ‘unspeakably ambitious’ goal, but took heart in the old proverb that ‘if Somali people come together, they can even mend a crack in the sky’. He hoped today’s conference would be a ‘game-changer’ for his country, and welcomed international assistance – even ‘targeted’ air-strikes against al-Shabaab, provided these did not harm innocent civilians.

However, he stressed that the only long-term solution was a Somali one, with a robust national army, police force and coastguard.

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Oil on troubled waters?

By Hanna Ucko, Global Conflicts Analyst; Coordinator, Armed Conflict Database

Strange news from Somalia, where they are drilling for oil. Some optimists believe that the conflict-ridden nation could be sitting on 3bn-4bn barrels, and Somali politicians say they hope that this can bring greater stability and development. But that may be a tall order for a country with no functioning central government for 20 years.

At least 362,000 people have died during this period, and the weak Transitional Federal Government (TFG) and its African Union peacekeeping allies remain embroiled in an all-out conflict with the Islamist group al-Shabaab. Ethiopia – again – and Kenya – for the first time – have both also recently sent troops into Somalia. Decades of such fighting has greatly damaged the country’s infrastructure as well as its stability.
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