Home Commodities How can CEMAC countries navigate future commodity booms to promote sustained development?

How can CEMAC countries navigate future commodity booms to promote sustained development?

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Source: World Bank Wealth of Nations; World Bank. “To end extreme poverty, getting back to pre-COVID-19 reduction rates is not enough.” November 30, 2022. https://blogs.worldbank.org/developmenttalk/end-extreme-poverty-getting-back-pre-covid-19-reduction-rates-not-enough.
Note: NR= SSA Non-Resource countries; RR: SSA Resource-Rich countries.

 

As the world experiences a new period of high commodity prices, CEMAC countries can draw valuable lessons from past commodity booms and implement appropriate policies that would help avoid the resource curse and achieve more favorable development outcomes. 

  • Resource-rich CEMAC countries should focus on converting natural resources into other forms of wealth, that is, using natural resources to invest in physical capital, human capital, and institutions (or intangible capital), with the goal of achieving a better balance between natural resources and the other assets.iii
  • Effective institutions are key in helping resource-dependent countries escape the resource curse. For example, Botswana and Chileiv are success stories among developing countries thanks to sound economic policies and prudent economic management, including in managing resource wealth and breaking the cycle of pro-cyclical fiscal policies. 

Ongoing reforms as part of the second CEMAC’s Economic and Financial Reforms Program (PREF-CEMAC II) are a welcome step. CEMAC institutions and member-states have made progress in the reform agenda, including in implementing financial inclusion strategies and promoting economic diversification but more needs to be done.  The timely and effective implementation of the policies foreseen in PREF-CEMAC II remains key for fostering a stronger, sustained, pro-poor and inclusive, and more diversified growth path in Central Africa.

 


Cust, J., Rivera, B. A., and Zeufack, A. 2022. The Dog that Didn’t Bark: The Missed Opportunity of Africa’s Resource Boom. Policy Research Working Paper; 10120. 

ii Cust et al. (2022).

iii Van Eeghen, M. W., Gill, I., Izvorski, I., and De Rosa, D. 2013. Diversified development : making the most of natural resources in Eurasia (English). Europe and Central Asia Studies Washington, D.C. : World Bank Group.

iv Izvorski, I., Coulibaly, S., and Doumbia, D. 2018. Reinvigorating Growth in Resource-Rich Sub-Saharan Africa; Reinvigorating Growth in Resource-Rich Sub-Saharan Africa. © World Bank, Washington, DC.

 

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