Insights on Oil and Mineral Based Economies with Zainab Usman

This week on On the Rocks, we chat with Zainab Usman about the similarities and differences in oil and mineral based economies! Be sure to tune in!

In this episode of On the Rocks Podcast, host Emily King sits down with Zainab Usman, the Director of the Africa Program at the Carnegie Endowment for International Peace and author of "Economic Diversification in Nigeria: The Politics of Building a Post-Oil Economy". Zainab and Emily dig into the discussion of managing natural resources in different countries and economies, especially those rich in oil and mineral commodities. 

One of the key themes discussed in the episode is similarities and differences between countries that are rich in oil and gas versus mined commodities. Examples include:

          • Similar - These are all non-renewable, natural resources, and important to many economic and industrial activities. 
          • Similar - Revenues tend to be quite large, generated by exports, and typically captured by the government. Because of this, there is a strong external dimension, meaning the economies are vulnerable to the volatility to the international pricing of these commodities.
          • Different - The process of extraction is very different. The enclave nature of oil extraction and production can be very dissociated from the rest of the economy, and the jobs created can be very minimal. The mining sector also has an enclave nature, but it tends to be more labor intensive and have more people engaged. 
          • Different - The scale of revenues generated tend to be different, with crude oil the scale of revenues tend to be much larger than the mining sector due to the dynamics of the global market.

Zainab also challenges the idea of the "resource curse", due to many countries that have been able to successfully manage their natural resources for economic growth. The key, according to Zainab, is to identify the broader challenges that need to be addressed and get the diagnosis of the problem right. 

Tune in to the full episode to learn more about these challenges, and what to keep an eye on when considering investing in these jurisdictions! 

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