Africa has a lot of natural resources but has always relied on foreign aid. Nonetheless has famine, poor road network, poor Healthcare etc. Please explain.
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One reason is called the “resource curse”.
You would think have abundant natural resources (diamonds, minerals, oil, rare earth metals, etc.) to export and sell for money would lead to a strong economy and a better standard of living. In practice, the opposite often happens.
If you have resources but start out with a relatively weak economy and poor government institutions, you essentially become a magnet for stronger countries to plunder your resources. Wealthy countries (“the West”) use their overwhelming advantage in capital and technology (technology and experience needed to extract resources, money to corrupt local political institutions, access and control of markets to sell resources, etc.) to gain favorable / one-sided deals with poorer countries.
Wealthy countries only need to capture, compromise and control the wealthy elites in poor countries (who, in turn, exercise control over their populations). This can be done at a fraction of the value of the resources extracted. Outside money pours into the private (off-shore) bank accounts of the moneyed elites in poor countries, further corrupting political processes and institutions. Very little of that money makes its way down to ordinary citizens of poor countries.
So what money does come into the poorer country turns around and is largely invested in the wealthier countries banking system / economy, and very of the money generated by the poorer countries resources stays in the poorer country.
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