Resources Policy 40 (2014) 1–3
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The extractive industries and development in sub-Saharan Africa: An introduction Gavin Hilson Faculty of Business, Economics and Law, University of Surrey, Guildford GU2 7XH, United Kingdom
art ic l e i nf o
Keywords: Sub-Saharan Africa extractive industries oil and gas mining development poverty
a b s t r a c t This paper introduces a special issue on the extractive industries and development in sub-Saharan Africa. The special issue draws attention to the potential for the region's extractive industries to deliver muchneeded development and the challenges with making this a reality. It also draws attention to alternative and possibly more suitable extractive industries-based development strategies for the region. & 2014 Published by Elsevier Ltd.
Introduction Over the past two decades, sub-Saharan Africa has become a popular destination for multinational mining and oil and gas companies. It has an abundance of natural resource wealth and today, is seen by many foreign investors as a ‘new frontier’. Lured by generous tax breaks and the freedom to develop on their own accord, multinationals have, in recent years, laid stake to vast stretches of its landscape, their production potentially netting host governments significant amounts of revenue (Campbell, 2004, 2006; Hilson and Okoh, 2013). Oil and solid mineral production are now booming throughout the region. An emphasis on the expansion of the extractive industries, however, has, for the most part, failed to deliver much-anticipated development to sub-Saharan Africa. There is broad consensus in the literature that host governments are not equipped to handle this level of industrial expansion; and, that the sudden arrival of mineral and/or oil rents has simply exacerbated pre-existing societal inequalities, nourished rentier politics and/or further divided societies. In the most extreme of cases, such as Nigeria (oil) and Sierra Leone (diamonds), natural resource wealth has perpetuated conflict; and, as witnessed in the likes of Angola (oil and diamonds) and Equatorial Guinea (oil), has fueled kleptocratic and autocratic behavior. This raises an important question: does the current extractive industries and development model being followed in sub-Saharan Africa need to be overhauled, and are donors and governments prioritizing the right things? Few regions of the world boast as diverse and eclectic an extractive industries sector as sub-Saharan Africa. The papers in this special issue of Resources Policy draw attention to the potential for the region's extractive industries to deliver much-needed
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development and the challenges with making this a reality. The issue also draws attention to alternative and possibly more appropriate extractive industries-based development strategies for the region.
The extractive industries and development in sub-Saharan Africa: the challenges The special issue opens with a paper by James van Alstine and Ralf Barkemeyer which, very importantly, reviews the many discourses of extractive industries and development and offers critical reflections moving forward. The paper describes, inter alia, how mining and oil and gas multinationals have been ‘incentivised’ to engage in ‘good governance’ initiatives such as the Extractive Industries Transparency Initiative (EITI). This is a reflection of where the policy ‘mindset’ is, at present, in the context of the extractive industries and development, and very much epitomizes what is wrong with the particular recipe being promoted in sub-Saharan Africa. Countries that are signatory to the EITI, a voluntary policy intervention, have pledged to disclose details of extractive industries-related payments and flows. There appears to be growing belief in policymaking circles that increased transparency is a key to mitigating the resource curse and transforming the extractive industries into the engine of development it should be. But in the case of sub-Saharan Africa, as Hilson and Maconachie (2009) explain, the EITI cannot possibly be expected to facilitate improvement on its own, particularly the political changes needed to ensure that the benefits from the extractive industries are distributed more equitably. The second paper, by Caitlin Corrigan, echoes these points, concluding that the EITI is incapable of facilitating a transition to democracy, improving political stability
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and reducing corruption and therefore, changes which must be made in order for the extractive industries to become more of an engine for development in sub-Saharan Africa. These problems must be tackled if interventions such as the EITI are to have any traction. The challenges with doing so, however, are considerable, as is highlighted in the next four papers in the special issue. The first, by Shirley Smith and Peter Dorward, explores stakeholder relationships in the chromite mining region of Northern Madagascar. The authors provide a detailed picture of the nepotism that is widespread at all institutional levels, and the impenetrable hierarchies in rural communities, which prevent the equitable distribution of benefits from mine production. Similar phenomena persist in Nigeria's Bitumen Belt, where, as Adesoji Adeniyi explains in the second paper, moves made to develop the resource-rich area have been undermined by political and socioeconomic challenges. This has deprived local communities of much-needed development. The fifth paper, by James van Alstine, Jacob Manyindo, Laura Smith and Jami Dixon, draws attention to the issue of ‘governance gaps’, focusing on the case of Uganda, a new petro state in subSaharan Africa. It argues that the ad hoc and fragmented modes of resource governance in the country's oil-bearing regions, particularly in the areas of transparency and Corporate Social Responsibility (CSR), do not bode well for the country's development trajectory. With an autocratic regime that has long deprived its people of civil liberties, Uganda is unlikely to use the monies derived from its new-found oil productively (Holterman, 2014). This marginalization, explains Devin Holterman in the sixth paper in this special issue, should be broadened to include violence and persecution across all scales, including environmental and nonphysical forms of violence (referred to as ‘slow violence’). This, explains the author using the case of Tanzania, provides a better understanding of the level of impact extractive industries have had at the local level in the region. Much of the same applies to a country such as Ghana, its political stability, long history of gold mining and relatively good governance providing a source of inspiration for those convinced that oil can catalyze development in sub-Saharan Africa in the current policy environment. The seventh paper, however, cautions that despite these attributes, the danger of a resource curse ‘epidemic’ surfacing as a result of new-found oil in Ghana is very real. The country's offshore oil production is oriented for export, and revenues from production are not being used for local development (Ackah-Baidoo, 2012): reinforcing Ferguson (2005), the country's operations are very much a resource enclave, attracting capital that ‘hops’, as opposed to investment that flows, into the country and which, in the process, catalyzes downstream industrial development and spawns linkages to other segments of the local economy.
The extractive industries and development in sub-Saharan Africa: possible ways forward The remaining papers offer perspectives on alternative and potentially, more viable, development pathways for the region's extractive industries. First, André Standing asks whether cash transfer schemes could assist in delivering much-needed funds to the local level in natural resource-rich regions of sub-Saharan Africa. Focusing on the case of Ghana, the author considers the feasibility and potential benefits of developing such an initiative using revenues from the extractive industries, a move which could potentially help to deliver financial benefit to poor populations which do not seem to be benefiting from rents. The next five papers examine various aspects of the region's artisanal and small-scale mining (ASM) operations: low-tech, labor
intensive mineral extraction and processing activity. This industry, explain Hilson and McQuilken (2014), has, rather curiously, long been overlooked by policymakers and donors, in large part because of the belief that it is populated mainly by entrepreneurs. Little has changed over the years in this regard, despite evidence which points to the sector being poverty-driven across subSaharan Africa (Banchirigah, 2006; Maconachie and Binns, 2007; Hilson, 2012) and actually supporting other subsistence economic activities, such as faming (Maconachie, 2011; Hilson and Garforth, 2013). Lost in discussions about the need to promote large-scale mine development in sub-Saharan Africa are the contributions ASM is already making to local economies. These issues are unpacked further by Mark Hirons in the ninth paper of this issue. Profiling the dynamics of a recent gold rush in Ghana, the author highlights the importance of the ASM sector in rural sub-Saharan Africa. The following paper, by Sara Geenan, draws on experiences from the Democratic Republic of Congo to explore further the implications of neglecting ASM's growing importance, economically, in the region. The author explains how the arrival of a large-scale company, with the backing of the government, has caused dispossession and displacement, altering power relations and leaving artisanal miners with few incomeearning alternatives. The 11th paper, by Jocelyn Kelly, builds on the points put forward by Sara Geenan. It argues that, for Congolese youth, ASM, which offers cash-in-hand, is a much more appealing employment avenue than farming, and is now regarded by hundreds of thousands of local families as a primary source of income. The 12th paper, by Marie-Rose Bashwira, Jeroen Cuvelier, Dorothea Hilhorst and Gemma van der Harr, provides insight on how, presenting analysis on women's roles in the Democratic Republic of Congo's ASM sector. It calls on policymakers and donors to support their livelihoods, not to remove them from the sector. The penultimate paper in this issue, by Matthieu Bolay, makes the same argument in the case of Guinea. The author explores at greater length the relations between incoming multinationals and resident ASM operators. Similar to the case of the Democratic Republic of Congo, in Guinea, without adequate guidance from governments, disputes over access to land have inevitably surfaced. The displacement of artisanal mine operators, therefore, can be catastrophic for local people.
Concluding remarks It was not the intention of this issue to focus so heavily on ASM but in the current policy environment, the formalization of the sector's activities seems to be one of the most effective povertyalleviation extractive industries-based development strategies in sub-Saharan Africa. Formalization, however, has proved to be challenging in a landscape carved up to foreign multinationals (Siegel and Veiga, 2009). The difficulties with licensing small-scale operators will no doubt limit the impact of potentially-promising local solutions such as Fair Trade, certification schemes which could provide individuals with a means to ‘connect’ with Western jewellers, in turn, alleviating their hardships (Hilson 2008, 2014). But as John Childs explains in the final paper in this special issue, informality is hampering Fair Trade's ability to do so. Can the policy environment be overhauled to make the formalization of ASM a more achievable outcome in sub-Saharan Africa? In summary, this special issue of Resources Policy captures the essence of the diversity of the extractive industries in sub-Saharan Africa. Earlier versions of most of the papers in the special issue were presented at the Africa Studies UK Conference on 6–8 September 2012 at the University of Leeds, Leeds, United Kingdom. The author would like to thank the journal editors for their
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patience and encouragement, as well as all of the referees, whose critical feedback improved the quality of the papers in this special issue. References Ackah-Baidoo, A., 2012. Enclave development and ‘offshore corporate social responsibility’: implications for oil-rich sub-Saharan Africa. Resour. Policy 37 (2), 152–159. Banchirigah, S.M., 2006. How have reforms fuelled the expansion of artisanal mining? Evidence from sub-Saharan Africa. Resour. Policy 31 (3), 165–171. Campbell, B., 2004. Regulating Mining in Africa: For Whose Benefit?Nordic African Institute, Uppsala. Campbell, B., 2006. Good governance, security and mining in Africa. Miner. Energy 21 (1), 31–44. Ferguson, J., 2005. Seeing Like an oil company: space, security, and global capital in neoliberal Africa. Am. Anthropol. 107 (3), 377–382. Hilson, G., 2008. ‘Fair trade gold’: antecedents, prospects and challenges. Geoforum 39 (1), 386–400. Hilson, G., 2012. Poverty traps in small-scale mining communities: the case of subSaharan Africa. Can. J. Dev. Stud. 33 (2), 180–197.
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Hilson, G., Maconachie, R., 2009. Good Governance and the extractive industries in sub-Saharan Africa. Miner. Process. Extractive Metall. Rev. 30 (1), 52–100. Hilson, G., Garforth, C.J., 2013. ‘Everyone now is concentrating on the mining’: drivers and implications of changing agrarian patterns in the eastern region of Ghana. J. Dev. Stud. 49 (3), 348–362. Hilson, G., Okoh, G., 2013. Reforms, regulation and the rise of Ghana's ‘Dual’ gold mining economy. In: Campbell, B. (Ed.), The Extractive Industries and Poverty Reduction in Africa: The Renewal of Modes of Governance. Routledge, London. Hilson, G., McQuilken, J., 2014. Four decades of support for artisanal and small-scale mining in sub-Saharan Africa: a critical review. Extr. Ind. Soc. 1 (1), 104–118. Holterman, D., 2014. The biopolitical war for life : Extractivisim and the Ugandan oil state. Extr. Ind. Soc. 1 (1), 28–37. Maconachie, R., Binns, T., 2007. ‘Farming miners’ or ‘mining farmers’? Diamond mining and rural development in post-conflict Sierra Leone. J. Rural Stud. 23, 367–380. Maconachie, R., 2011. Re-agrarianising livelihoods in post-conflict Sierra Leone? Mineral wealth and rural change in artisanal and small-scale mining communities. J. Int. Dev. 23 (8), 1054–1067. Siegel, S., Veiga, M., 2009. Artisanal and small-scale mining as an extralegal economy: De Soto and the redefinition of “formalization”. Resour. Policy 34 (1–2), 51–56.