7 Summary of Session 2
This session has delved into different dimensions of the political economy of oil by looking at how governance of the sector in Nigeria has, over the past 50 years, resulted in poor long-term growth for the country. Despite being Africa’s largest economy, it has now overtaken India as the country with the most people living in absolute poverty. The session has explored the idea of the resource curse that has afflicted many African nations rich in natural resources, and you have seen that there are many different ways in which the curse can negatively impact on a country’s growth. The personal interests of political elites and short-term nature of the electoral cycle have conspired in Nigeria to create a climate where, for example, bargaining and capture of state institutions and oil revenues to ensure political survival trump investment in policies aimed at bringing wider developmental outcomes. Finally, you have seen how the management of natural resource wealth is about more than putting the right institutions in place; politics plays a critical role as well. Political settlement theory and ideas of African agency were used to highlight and think critically about how political elites in Nigeria have engaged with China and shaped how investment deals have been negotiated, challenging the often-held assumption that China can flex its economic might and bend the terms of agreements to its will.
In the next session, you’ll turn to the topic of local content, which involves building capacity in developing economies and is one strategy that can be used to try and overcome the resource curse.
You can now go to Session 3.