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7 Conclusion

It has been severally posited that it is acceptable for growth to be anchored on favourable terms of trade, natural resources abundance, geography (location to the cost), and endowment. Arguably, West Africa has (relative to history) managed the triple successes of disinflation, external debt reduction and reserves build-up. But countries in the sub region have clearly been helped by changing trade patterns, rising aid inflows and political structural reform, both within and among potential trading partners.

So will the sub-region's natural resources lead to prosperity? In answering the question, Waeber and Wassermann (2013) insist that whether Africa turns its natural resources into blessings or curse again depends on more than global factors such as commodity prices and demand, but equally on domestic conditions such as political stability, fiscal management and industrial policy. Clearly it is not only the inflows that matter; as most countries increase dependence on commodity exports, an immediate bubble burst may not be close in sight. But while these flows may for now, specifically given resource scarcity, be a necessary condition, the sufficient condition is that 'regular' macroeconomic management instruments be urgently complemented and enlarged to take on broader mandates of ensuring that resources from the high profit sectors are settled in the lower profit sectors—especially since the latter has little power of generating its own resources and kick starting growth.

It might be useful to end the discussion on prospects for West Africa with the below comments from a recent World Bank report coordinated by Shanta Devarajan.

While the broad picture emerging from the data is that Africa's economies have been expanding robustly and that poverty is coming down, the aggregate hides a great deal of diversity in performance, even among Africa's faster growers. The conclusion of the World Bank is that better administration of mineral wealth, development of agriculture and a careful managing of rapid urbanization would help governments to lift more people out of poverty. Africa's golden decade can be matched closely to China's soaring demand for commodities; Chinese demand accounts for half of many industrial metals exported from Africa. This has raised fears that the continent is overly dependent on the relationship and vulnerable to a sudden downturn.

The need therefore is for effective channeling of resource funds to employment generating productive sectors. And such channeling has to be deliberate; it does not occur haphazardly.

 
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