Resource Curse Unavoidable in African Countries

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In the next decade, more than twelve African countries will be high level of oil exporters and close to twenty five billion barrels of oil will be exported from Africa. The problem is with the new future oil boom, African countries will rely on rent and foreign aids only for income which will result in the money been misused by those in power. “External rents often ravage a state’s incentive structure when they significantly outstrip taxation -- say, by a factor of two or more”(Diamond and Mosbacher 2013). African countries have weak institutions that fail to prevent public officails from exercising power over the revenue from oil. If the citizens of the countries knew how much revenue they make from oil, then it will be easier to find out who and what is stealing the income. African institutions should emphasize more on accountability especially on the oil companies that buys the oil. If these oil companies can be able to show how much they pay to the governments for the natural resources, then it will be easier to hold leaders accountable.

The new raising oil countries should try a new policy, which is the ‘oil to cash system’. Since transparency has not work so well, the oil to cash system will help reduce the fundamentals of the resource curse. The policy is to directly distribute oil revenues as taxable income, which will get citizens, know that it is their money that the government is spending. It will build a domestic tax base and taxing the income will make the citizens aware of fiscal relationships and then forcing public officials to show accountability. The problem to achieving this system is politics because the leaders stay in power through the money they embezzle from oil revenues.

In order for the resource to be avoided in the future oil countries; they will need to adapt the new oil to cash system. Creating strong legal system, good government with transparency and accountability will help the new countries.

Work Cited

Diamond Larry, and Jack Mosbacher. "Petroleum to the People." Foreign Affairs, 12 Sept. 2013.