Africa losing billions in mineral wealth

(GIN)—New wealth from gold, copper and other minerals brought little benefit to the Congo—and should be a warning to Afghanistan where discoveries valued at more than $1 billion have just been found, writes economics professor Paul Collier in a recent New York Times editorial.

Security in Afghanistan could easily break down as it did not only in Congo but also in Nigeria (rich in oil) and Sierra Leone (diamonds).

“In eastern Congo, $1 billion in gold is being extracted and exported annually yet because government lacks control over the territory, revenues that reached the national Treasury last year were a mere $37,000,” wrote Collier.

In Zambia, copper exports of around $3 billion a year generate a mere $100 million in tax revenue for Zambians, he said.

Most important, he said, is that citizens who live near the mineral deposits benefit with jobs and spending on public works.

“Nigeria is a prime example of what happens when the local population pays the price for extraction without reaping the rewards,” added Collier.

This is part of the July 28, 2010 online edition of Frost Illustrated.

Have an opinion on this matter? We'd like to hear from you. Click here.