The poor level of skills and institutional development in natural resource management observed in most resource-rich African countries comes not only from the lack of incentives to invest in human capital but also from the perverse effects of the international division of labor.

Most resource-rich African countries lack specialized training institutes of management of their natural wealth. Yet human capital is a key factor for economic growth  and features as one of the strategic axes of both the African Union Plan of Action for the Acceleration of Industrial Development in Africa (PIDA) and the Agenda 2063.

Even more curious is the yet abundant potential workforce on the continent. Indeed, Africa is home to over a billion people, most of them under the age of 20. With 30% of the world’s known reserves of minerals and a booming population, the undeveloped capacities and continued imported expertise in natural resource management in Africa is unexpected. If capacity is “the ability of people, organizations, and society as a whole to manage their affairs successfully; and capacity development is the process by which people, organizations, and society as a whole unleash, strengthen, create, adapt, and maintain capacity over time” (as defined by ACBF, 2011), and if the lack of skilled human capital contributes to the persistent mismanagement of Africa’s natural resources, resulting in yearly massive financial losses, why have African resource-rich countries not developed local capacities to efficiently manage and exploit their natural endowment? Considering natural resources training schools as an indicator of capacity development, it is argued that the scarcity of such specialized schools persists because the incentives for local skills development are lower than elitists’ interests and because of some perverse effects of the international division of labor.

The imperative to invest in human capital

The African economies’ resource paradox actually lies in the lack of qualified human capital and dependence on both foreign markets and expertise. African resource-rich countries tend not to have specialized training institutes from where local expertise could emerge. Among the root causes of this situation is the clash between human capital development in Africa and both national and foreign interests.

The incentives for investments in human capital appear to be smaller than the profits of the current key stakeholders. Also, local natural resource management skills in Africa are limited by the states’ economic extraversion and dependence on primary commodities. Because the end product of African natural resources is not consumed in the domestic market but rather a foreign market, investments in skills development are low. In addition, the more commodities-dependent an African economy is, the less it invests in human capital.

Yet, human capital appears to be just as important as natural resources for economic growth of African countries; as the World Economic Forum puts it: “a nation’s human capital endowment–the skills and capacities that reside in people and that are put to productive use–can be a more important determinant of its long term economic success than virtually any other resource. This resource must be invested in and leveraged efficiently in order for it to generate returns–for the individuals involved as well as economy as a whole.”