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International Journal of Government Auditing – April 2015


Photo: John F. S. Muwanga President, Auditor General of Uganda and Chair of INTOSAI Working Group on Audit of Extractive Industries

The products of the extractive industry are a common good for the citizens of a nation. Regrettably this reality has seldom been realized in many developing nations, where the abundance of natural resources from the extractive industries has not created the much-needed relief from poverty. Instead, the natural resources have turned out to be a source of mounting problems, which have culminated in hostility, conflict and aggression— thus creating a scenario which is often referred to as the “resource curse.”

The resource curse

When compared to countries with much less natural resource endowment, many countries with rich natural resources—particularly in the developing world—continue to exhibit both slow economic growth characterized by weak governance structures and greater vulnerability to conflict. This resource curse phenomenon is inextricably linked to a lack of accountability and transparency in the extractive sector. In a nation, strengthening institutions of accountability is one of the necessary tools to transform the discovery of natural resources, however modest, into revenue flows that will bring about improved and significant impact on the quality of life of its citizens.


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