How to get rich from commodities: Tips from Botswana on how to avoid the resource curse (The Economist – June 8, 2023)

Africa’s soil is studded with buried treasure. Half the world’s diamonds are mined there. The largest producers of cobalt, manganese and uranium are all African countries. Since 2000 more big petroleum discoveries have been made in sub-Saharan Africa than in any other region. Yet Africans are not wrong when they talk of a “resource curse”.

The continent’s political elite have squandered or stolen much of the bounty, often aided by unscrupulous private firms. The World Bank predicts that by 2030, 62% of the world’s very poor people will live in resource-rich sub-Saharan countries, up from 12% in 2000. Resource-rich states are more likely to suffer dictatorship or civil war.

Managing resources better is crucial to the future of Africa. The world is hungry for its hydrocarbons. Its minerals are needed for cleaner energy. Sadly African politicians risk wasting the moment. Few pursue the right policies. One African country, however, has been a glittering exception, at least until recently—Botswana.

At independence in 1966 Botswana was one of the poorest countries in the world. It sold beef but little else. It was home to just 22 university graduates. Over the next four decades its economic-growth rate rivalled that of China, Singapore and South Korea; today it is one of the richest countries in Africa.

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