Empowering Africa

Updated: Feb 26 2014, 07:57am hrs
Out of twenty resource richmost of these resources are minerals such as iron ore, gold and bauxitecountries in sub-Saharan Africa, 14 have some of the lowest per capita income. Behind the problem, former UN secretary-general Kofi Annan says, is the poor negotiating power the governments of such countries have when they face mining companies on the table, thanks to information asymmetry. Annan points out in his 2013 paper, The Africa Progress Report, that governments are selling mining concessions too cheapDemocratic Republic of Congo alone lost $1 billion selling five mining assets, a comparison between the actual selling price and an independent assessment points outbecause most of these countries dont have the required geo-data to peg a rational value to their resources; in fact, the governments often possess much lesser information than the companies.

It is in this context that the World Banks recently-launched

Billion Dollar Map project seeks to prop up the countries for better negotiation. Ground work for the project has been on for the last ten years with the Bank investing over $200 million. At the moment, collation of geo-physical data of the entire landmass of Malawi is under way. The Map will be a handbook of sorts for the governments with consolidated geo-data. Such publicly available data would also incentivise investment by making exploration more efficient. Potential investment, from access to such data, would indeed shoot past the development assistance many of the countries receive.