Tag extractive industries Mozambique; coal Mozambique

Government Revenues – the only real benefit from the extractive sector?

Advocates of natural resource extraction in developing countries commonly list five benefits: economic growth, employment, infrastructure, community investments, and government revenue.

Our conclusion is unambiguous: the overwhelming benefit is government revenues. Here’s a roundup of why…

Natural resources – a curse, a blessing, or a “preventable disease”

According to conventional wisdom, a rich endowment of natural resources represents a curse, not a blessing, as resources are said to do more harm than good. Findings show that the resource curse may be overstated in the case of Mozambique.

Firstly, natural resource dependence has been linked to increased incidence of civil war in places like Angola, Sierra Leone and the Democratic Republic of Congo.

In the case of Mozambique, natural resources were not a factor in the civil war. A distinction can be drawn between resources that are “lootable” – those that can be exploited with out sophisticated technology – and those that require industrialized production. While there is artisanal production in Mozambique, the majority of the mineral wealth can only be exploited with industrial technology.

Building the investment case for children

The extractive industries are the most important developmental opportunity and challenge in Mozambique today.  There is great potential for the coal, gas and other mineral resources to act as a driver for development.  There are also large risks involved.  Tete province, the current centre of mining exploration and production, is already one of the poorest provinces in the country with 60% of children experiencing deprivation-based poverty: only 69% of children are in primary school and 48% of children are stunted.  The mining sector is already causing substantial price inflation in the province, particularly for food, which will impact poverty rates and the nutritional status of children.  Anecdotal evidence from families in resettlement areas indicate even less access to basic health services and education, while long term environmental effects may lead to even more precarious livelihoods for the populations in and around the mines in the years to come.