by The political climate in the Central African Republic (CAR) has been in a combative state of civil war since 2012. The current conditions of the conflict have made it nearly impossible for humanitarian agencies to operate. There have been documented attacks on humanitarian aid workers and the United Nations relies on Humanitarian Air Service to deliver life-saving supplies in the safest manner possible.
While humanitarian organizations struggle to run, the hopes of businesses and entrepreneurs wanes further. Emergency and support services are interrupted by the conflict. Inefficient government systems and deteriorating infrastructure stand in the way. A major part of the economy has become informal, as well as wage earning trades. CAR’s abundant natural resources would have taken care of most entrepreneurial investment and development. Unfortunately, the conflict has driven these industries into the informal economy.
CAR’s poverty and microeconomic outlook depends highly on the stability of the country, investment, and export growth according to the World Bank. An increase in business is crucial to improving the development of the country. According to current statistics, the Central African Republic ranks 181 out of 190 in conducting business and has a 60.9% ranking in starting a business. The economy of CAR is unstable and ranks as one of the lowest in the world, which means it currently does not have favorable conditions for entrepreneurship. In order to understand where the greatest potential for entrepreneurial activities lies, let’s examine where others are investing in Africa.
China has been investing heavily in Africa over the last few decades and their choice of investment gives us a clue as to possible opportunities for entrepreneurs in CAR. China’s interests are not only economic, but also political and security related. Of particular interest to China are Africa’s natural resources: rubber, gold, diamonds, oil, and the like. According to Chinese President Xi Jinping, “in 2013, Chinese-African trade surpassed the US$200 billion mark for the first time, making China Africa’s biggest trading partner”. This represents not only the potential growth in the market of natural resources in Africa, but also the investment opportunities for African entrepreneurs. China has identified minerals as a potential successful investment, which means the industry could be dominated by the Chinese in a few years. Given minerals are in high demand, Central Africa can benefit from reclaiming their mining industry to boost their national economy, as well as their income. The Central African Republic is home to an abundance of natural resources such as minerals, timber, fertile land, and wildlife. Where China has found a way to enter the market on these resources elsewhere in Central Africa, these resources are the most viable for entrepreneurial development purposes.
Due to the prolonged violence in CAR over the last three decades, these resources have been mismanaged by the government and elites. Harnessing CAR’s natural resources to stimulate the economy can only be accomplished through an end to the ongoing violence and corruption. The civil war in the Central African Republic is arguably the largest factor hindering development of the resource sector. The illicit economy has begun to flourish due to mismanagement of mines. The armed combatants in the CAR conflict have been using the illicit mineral trade to finance their operations, hijacking the mineral trade.
There is evidence properly exploiting the mining industry can salvage the local economy. In 2007, USAID in partnership with the US Department of State created the Property Rights and Artisanal Diamond Development Project (PRADD) in order to follow the Clean Diamond Trade Act of 2003. The objective of PRADD is to,“1) identify, clarify, and formally recognize the customary land and natural resource rights in their target areas; 2) to strengthen GoCAR’s system for reliable tracking of production and initial sale of diamonds; 3) to increase benefits of mining activities in local communities, including diversifying and intensifying food production; 4) to strengthen the capacity to prevent and mitigate environmental impacts of ASM; and 5) to increase access and availability of information on artisanal diamond mining to stakeholders”.
In 2010, the Post-Mining-Income-Generating Environmental Rehabilitation Program (POMIGER) was created in order to fulfill these objectives. POMIGER created communication tools, education materials, constructed fish ponds, and increased capacity for farming. This program has been successful because the prices of minerals have dropped due to the conflict. Families initially made most of their livelihood from this price drop. Aside from providing jobs to locals, it has helped to tackle the problem of food insecurity due to the conflict. The results from this program showed an increase in the local economy and reduced the dependence of the local population on diamonds. The success of POMIGER demonstrates it is possible to revitalize the mineral sector and help Central Africans work and contribute to the economy.
The natural resource sector, mainly minerals, is an area where entrepreneurs may find much success. The Chinese have already noticed its potential and will dominate the industry, unless Central Africans are able to regain it. The challenges to this are that the CAR government has severely mismanaged resources and the conflict has hampered economic growth. Through internationally funded programs like POMIGER, there is a real chance the natural resource sector can be revitalized and be placed back in the hands of the Central Africans.
By working to reconstruct the economy of CAR through reclaiming sectors, CAR will be able to grow its economy to work towards developing more technological entrepreneurial advancements.
Bibliography
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