Donald Kaberuka, the President of the African Development Bank and the leading voice for forward-leaning economic policy on the continent, has come out publicly in favor of paying some portion of natural resource windfalls as a direct dividend to citizens. We’re pretty excited about this policy idea at CGD, and have been thinking through some of the pros, cons, and practicalities of what we call Oil-to-Cash. Watch this space for our Oil-to-Cash book later in 2014.
In the meantime, we’re talking quietly with interested parties, including a few governments that are keen to learn more about the idea and how it might work. To help us get over some initial skepticism, I’m thrilled to gain a high-level endorsement from someone of Kaberuka’s stature. At the Mo Ibrahim Foundation forum in Addis Ababa in November, he said:
Now, this issue of where is the dollar in the pocket of the African people is fundamental for the leaders to address. It is the biggest elephant in the room. …Every single country has to think about what to do…Those who have oil, please consider—I know it's controversial—consider transferring some of that money as direct transfers to citizens. Controversial, but it should be considered. It's much better than these huge subsidies which are undermining treasuries and creating inequalities. A bit of that money—10%, 20%—direct to the people.
Here's the clip:
See the full video here.
Disclaimer
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.
