Mineral wealth leads to slower economic growth for some African nations

One of the sad paradoxes of Africa's oil producing countries is that there can be great wealth under ground, but very little for the people above it. Oil producing nations can pump a lot of oil, but all of that money never seems to change poverty levels.

A new report from the World Bank shows that economic growth in oil producing nations is actually slower that African countries without it. From the Guardian, writer Mark Tran unpacks the report.

Africa's Pulse, a twice-yearly analysis of Africa's economic prospects, noted that the decline in poverty rates in resource-rich countries has generally lagged behind that of countries without riches in the ground. Some countries, such as Angola, Congo-Brazzaville and Gabon, have witnessed an increase in the percentage of the population living in extreme poverty.

The report confirms the common perception that, to a large extent, the benefits of growth have not reached the poorest segments of society. It raises questions for aid donors and African governments on how to deal with the "resource curse", with strikes in South African mines providing a stark illustration of what is at stake.

"Resource-rich African countries have to make the conscious choice to invest in better health, education, and jobs, and less poverty for their people, because it will not happen automatically when countries strike it rich," said Shantayanan Devarajan, the World Bank's chief economist for Africa, and lead author of Africa's Pulse. "Gabon, for example, with a per-capita income of $10,000 (£6,200) has one of the lowest child immunisation rates in Africa."

How to ensure that natural resources benefit the general population, not just the elite, is a question likely to grow more acute as discoveries of oil, gas and other minerals in African countries are expected to generate considerable wealth in the future.

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Africa's Pulse underlines the continent's heavy dependence on commodities for its recent growth, although domestic demand has played its part. Sub-Saharan Africa is expected to grow at 4.8% in 2012, broadly unchanged from 4.9% growth in 2011, and is largely on track despite setbacks in the global economy. Excluding South Africa, the continent's largest economy, growth in sub-Saharan Africa is forecast to rise to 6%.

While African economies have not been immune to the crisis in the eurozone, the World Bank said consistently high commodity prices and strong export growth in countries with mineral discoveries in recent years have fuelled economic activity and are expected to underpin economic growth for the rest of the year.