Natural resources, structural change, and industrial development in Africa

This project focuses on three specific areas that impact the pace of structural transformation and job creation in five emerging African natural resources economies: Ghana, Mozambique, Tanzania, Uganda, and Zambia.

Africa is richly endowed with natural resources, and new discoveries in such previously non-resource-abundant economies raise the prospect that an increasing number of African countries will become resource exporters in the future. The exploitation of natural resources is a huge opportunity, but it is also one that carries considerable risks. The long run success of Africa’s newly resource-abundant economies will depend in large measure upon the choices that governments make as they put in place the institutions, policies, and public investments that will underpin structural transformation.

This project focuses on three specific areas that impact the pace of structural transformation and job creation. The first area develops evidence on the magnitude and timing of the resource boom for each country and makes recommendation on the content and sequencing of the policy and institutional changes needed to manage public expenditures and investments more efficiently. Investing resource revenues to expand infrastructure and human capital in part requires public expenditures in physical assets. The construction sector largely determines the ability of an economy to transform this investment effort into outcomes.

The second project area focuses therefore on country-level analysis of the role of the construction sector and its response to surges in demand, key bottlenecks and policy options to relieve them. Natural resources change the balance of power between national governments and foreign firms.

The third project area hence critically evaluates current legislative and regulatory initiatives within the five countries and maps existing supply chain relationships, surveys the capabilities of domestic firms as reliable suppliers, and proposes new approaches to increasing domestic linkages to the resource value chain.

The project’s country-level findings and cross-country studies will be published in a synthesis volume.