Africa's vast natural wealth including minerals, oil, gas and rare metals if prudently utilized has the ability to leapfrog the continent to new heights of prosperity besides hastening the continent's green transition, the World Bank said in a new report launched Wednesday.
Titled "Africa's Resource Future," the report suggests that African states should leverage rising demand for metals, hydrocarbons and precious minerals to finance social programs like health and education, diversify their economies and expand access to energy.
On average, African countries capture only 40 percent of the revenue they could potentially collect from natural resources, yet they are grappling with slow growth and high public debt, according to the World Bank report.
Governments in the continent could double revenue from natural assets by adopting a set of progressive legislation and policies, implementing reforms, promoting good governance and improving their fiscal administration, according to the report.
In addition, the report says that optimal taxation of natural resources is key to catering to the ecological and social impacts that are not fully covered by producers, including oil drilling companies, says the report.
James Cust, a senior economist in the Office of the Chief Economist for Africa Region of the World Bank and co-editor of the report, noted that harnessing revenue in the form of royalties and taxes paid by private natural resource industries will unleash multiple benefits for citizens and the environment in the continent.
Cust added that higher revenue from Africa's abundant natural assets is welcomed in countries that are exploring ways to come out of ballooning debts and require new capital flows into strategic sectors of the economy.
The report says unprecedented demand for a host of minerals required to facilitate global green transition including cobalt, lithium, copper, nickel and rare earth elements, which are abundant in Africa, promises the continent an economic windfall.
It says Africa should avoid a resource curse and instead embark on prudent utilization of minerals, hydrocarbons and rare metals to support poverty alleviation and expand access to essential services such as education, health, clean water and decent shelter.
Albert Zeufack, the World Bank country director for Angola, Burundi, the Democratic Republic of the Congo, Sao Tome and Principe and co-editor of the report, said that harmonization of regional policies and legislation is key to creating robust value chains in the extractive sector.
Zeufack stressed that seamless integration as enshrined in the African Continental Free Trade Area offers an opportunity for the continent to reap economic, social and ecological dividends linked to natural assets.