Use cellphones to share Africa resource wealth -WB

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Mobile phone banking should be used to direct some of Africa’s oil and mineral wealth straight to the population, reducing the role of corrupt governments and tackling poverty, according to a senior World Bank official.

The continent is riding a commodities boom driven by high minerals and oil prices and analysts expect the trend to continue. But graft and bad governance means revenues have been squandered and resource-rich countries have consistently failed to deliver basic services to their people.
“Imagine your country finds a valuable commodity and before it goes into the national budget, and people fear it will be wasted, it could be sent directly to people,” said Marcelo Giugale, the World Bank’s head of Poverty Reduction and Economic Management in Africa, Reuters reports.

Giugale, in an interview on Wednesday, said mobile phone technology, already used in some countries to do everything from paying everyday bills to dispatching emergency cash for healthcare and schooling, could be the answer for Africans.
“It would break the cycle of corruption and wastage, the resources curse,” he added.

Mobile banking technology allows users to transfer and receive funds from cell phone to cell phone, and could be used by the governments in African oil- and mineral-producing countries to easily disburse dividends to residents.

INFRASTRUCTURAL OBSTACLES

The industry is expected to grow into a $22 billion dollar business in Africa by 2015, according to consultancy Juniper Research, as about a half a billion Africans already use cell phones and distributing money by other means on the continent can be tedious, unreliable and costly.

Oil producers like Norway and the U.S. state of Alaska already pay dividends to qualified residents as a way of sharing out resource wealth, though they do not use mobile banking.

Giugale believes a wealth distribution scheme via mobile phone would also help increase accountability as local people would feel more directly involved in the exploitation of their natural resources.
“(Even) if people are only receiving 10 percent (of the profits), they will be engaged in what happens to the other 90 percent,” he said.

Giugale did not say whether there were any concrete measures afoot to put the idea into practice.

Nicholas Shaxson, an Africa oil analyst and author of the book Poisoned Wells, said any such scheme would be controversial and tricky to implement in Africa but should not be ruled out as Africa needed a radical solution to break cycles of corruption.
“The basic objection (from many people) is that the idea is too weird, but when you start thinking of ways it could happen it’s not as crazy as it seems,” he said.



Meanwhile, politicians currently involved in “sharing out the cake” would also put up a fight as it would disrupt the patronage system currently backed by resource wealth, he said.
“If you could find a way to distribute the wealth directly to individuals it would avoid this problem, you would be transferring power from the rulers to the ruled,” he added.