Working Paper 283 - Mineral Resource Accounting Measures in Africa

Prior to the end of the prolonged commodity boom that led up to the 2008 recession, much was made of the rapid growth in GDP demonstrated by many African countries. The continent’s rising GDPs were held to be heralding a new dawn: a turn in the evolutionary economic downward cycles that had typified many of its economies since the end of the colonial era. The rapid fall in commodity prices as the global recession took hold showed the limitations of these high hopes, and the weak foundations on which some of them had been based. In this paper, we will begin by checking the veracity of this economic portrait, assessing the dependence of the income of eight mineral-resource-rich sub-Saharan African countries on their mineral commodities. The paper then compares the relationship between an economy’s fiscal deficit before borrowing and National Income as conventionally recorded, as opposed to that between the deficit and the National Income as calculated following the El Serafy method. It then discusses some of the challenges towards efficient resource management in low-income mineral-resource-rich sub-Saharan African countries.