As NRGI gathers data in the effort to improve international benchmarks of national oil company performance and revenue management, figures from Extractive Industries Transparency Initiative reports are proving extremely valuable. This is especially the case in a number of African countries where state companies do not produce detailed financial reports on their own.
Resource-rich countries tend to experience slower economic growth and more social problems than do less-endowed countries—a phenomenon dubbed the “resource curse.” But it turns out that in many cases, economic growth begins to underperform long before the first drop of oil is produced; this we call the “presource curse.”
NRGI set out to collect total oil, gas and mining revenue data for the countries included in the Resource Governance Index to find out how many dollars flow to governments that mismanage the handling of their natural resources.
A 10-year boom in the prices of many commodities drew to a close last year. During previous booms, governments in developing countries have often squandered wealth accumulated through oil, gas and minerals, directing little of the proceeds toward effective investment or saving. When boom turned to bust, resource-rich countries were caught out, forced into debt spirals.
The evidence is mounting: contract transparency in extractive industries is becoming the norm. This was clear during two contract-focused events at the recent EITI conference—an informal learning and sharing side event and an official conference panel event.