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Why regional integration is so important for resource-driven diversification in Africa

Published on March 17, 2016

Natural resources management, particularly in the extractives industry, can make a meaningful contribution to a country’s economic growth when it leads to linkages to the broader economy. To maximize the economic benefits of extractives, the sector needs to broaden its use of non-mining goods and services and policymakers need to ensure that the sectors infrastructure needs are closely aligned with those of the country’s development plans.

In Africa, especially, mining and other companies that handle natural resources traditionally provide their own power, railways, roads, and services to run their operations. This “enclave” approach to infrastructure development is not always aligned with national infrastructure development plans.

In a continent facing massive infrastructure needs, African countries can thus miss out on opportunities to promote the shared use of infrastructure and to strengthen the linkages between extractive resources and the broader economy. Non-mining businesses like farms or food traders in sparsely populated or remote areas, for example, would benefit from shared infrastructure, since railways, roads and electricity are all needed to bring goods to markets. Read more. Source | 
The Trade Post | World Bank blog