Natural Resources Can Spur Growth But Need Good Management

Kinshasa conference part of IMF’s heightened focus on natural resource management

Management of natural resource revenue poses significant economic challenges

Requires appropriate tax policies, fairer and more equitable contracts, and strengthened revenue administration

Participants from more than 20 countries underlined the importance of taking advantage of the current high commodity prices to strengthen public financial management so as to scale up investment efficiently and establish the basis for broad-based and sustained economic growth.

Matata Ponyo Mapon (r) opens the conference with Antoinette Sayeh (photo: Guy Debosscher )

“Good management of natural resources in Africa is of vital importance for ensuring that this endowment benefits all Africans,” said Matata Ponyo Mapon, Minister of Finance of the Democratic Republic of Congo, which hosted the March 21-22 conference with the IMF. He contrasted the riches of some countries with the extreme poverty of some of their citizens.

“We must use our combined knowledge to find ways to turn substantial resource assets into greater economic welfare,” Antoinette Sayeh, Director of the IMF’s African Department, stated at the start of the conference.

Modest contribution

Minister Matata with Gilbert Ondongo , Minister of Finance for Congo-Brazzaville (photo: Guy Debosscher)

Delegates, noting that oil, mining, and other extractive industries often contribute relatively modestly to public revenues, agreed that reviewing tax policies and strengthening revenue administration are important objectives for natural resource producers. They welcomed the increased focus of technical assistance in this area, including from the International Monetary Fund.

The conference on the “Management of Natural Resources in Sub-Saharan Africa” brought together about 200 policymakers, leading academics, the private sector, civil society organizations, central banks officials, and the media from across sub-Saharan Africa as part of a consultation process launched by the IMF to gather ideas about the best use of natural resources for boosting living standards in developing countries.

The IMF is seeking views on the best ways to tax natural resources, and how to use the money earned to boost standards of living in the countries that own them.

Better management

Participants agreed that the management of natural resource revenue posed significant economic challenges, including dealing with commodity price...