Only people at the top believe in the drip down effect

Headline growth figures - and the attendant gushing media headlines - often obscure important facts. And this is certainly the case with the whole 'Africa is Rising' consensus. Based on soaring GDP figures, politicians, economists and journalists have rejoiced in the long-awaited roar of the African lion.

Richard Lee's picture

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Strategic communications for WWF

October 8th, 2012

Headline growth figures - and the attendant gushing media headlines - often obscure important facts. And this is certainly the case with the whole 'Africa is Rising' consensus. Based on soaring GDP figures, politicians, economists and journalists have rejoiced in the long-awaited roar of the African lion. From Angola's oil-soaked boom to Zambia's copper-clad rejuvenation to Mozambique's gas and coal fuelled economic emergence, commentators have consigned the previous (and just as inaccurate) hopeless continent consensus to the historical scrapheap and relentlessly hyped Africa's natural resources driven rise.

However, there is one problem with this view - it doesn't seem to be having much of an impact on the lives of most Africans. Indeed, the famed drip down effect (beloved of all those sitting happily on the very top of the tap) is not functioning at all in resource-rich African countries. And that's not the conclusion of activists or pro-poor economists or left-wing politicians but of the World Bank. In its latest Africa Pulse report, the Bank highlights the continent's continued growth but also shines a spotlight (at long last) on the fact that poverty in resource-rich countries (those doing so well out of astonishingly high prices for oil, gold, copper, cobalt etc.) is not coming down. Indeed, in some - such as Angola - already high poverty levels are increasing and most people still don't have taps.

This research whips away what little support drip-down supporters still had, exposing the whole model for what it is - a charade to ensure that oil companies, mining corporations and other big businesses and the politicians-in-their-pockets can continue to siphon off vast profits from Africa's mineral wealth, without sharing it with the people who actually 'own' it. If this report isn't a rallying cry for a new approach - for dumping the drip down effect and adopting more sustainable, pro-poor policies, particularly in relation to natural resources - then I don't know what could be.

Indeed, Shantayanan Devarajan, author of the World Bank's report says it best, "Resource-rich African countries have to make the conscious choice to invest in better health, education, and jobs, and less poverty for their people."

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