The politics of natural resource investments in Africa: Rights, exchange and holding power

Large-scale investments in natural resources can help transform African economies by accelerating economic growth, creating jobs and strengthening the links between local economies and the global economy. However, they often depicted as violating the rights of local populations and leaving them with few benefits, which in turn may lead to social protests and political instability, potentially causing investments to be delayed or abandoned. Furthermore, existing literatures tend to focus on government-investor relations (the resource curse and political settlement literatures) or investor-local population relations (the land grab and corporate social responsibility literatures).
In this paper, we explore comparatively the potential for implementing large-scale investments in natural resources while accommodating the rights of local populations. The framework we develop focuses on the three-way exchange relationships between investors, local populations and ruling elites. In a two-step process we argue first that these three relationships and what is exchanged between the parties need to be taken into account in order to understand why investments are implemented in the first instance. In a second step, we argue that the conditions under which large-scale investments in natural resources are implemented, while at the same time accommodating the rights of local populations are related to the specific fit between what characterize the relationships between the actors: the compatibility of interests between investors and ruling elites; reciprocal exchange relations between investors and local populations; and mutual recognition between the latter and ruling elites. This also suggest that local populations may play a bigger role in large-scale natural resource investments than often acknowledged, but that their power differ from one sector to another and from country to country. The paper is based on extensive fieldwork and a comprehensive dataset generated by members of the “Hierarchies of Rights: Land and Investments in Africa” research team. We use this framework comparatively to explore the implementation of large-scale investments in natural resources in three sectors – gas/oil, mining and agriculture – in Mozambique, Tanzania and Uganda.