Donor interest in the natural resources extractives sector is based upon the premise that it represents an opportunity to improve a country’s development prospects. However, in many cases the presence of extractive resources is associated with poor economic performance. As a result, some donors are trying a radically different approach. This chapter explores one such programme funded by the UK Department for International Development: the Facility for Oil Sector Transparency and Reform in Nigeria. The chapter outlines five lessons learned from this example. First, continual analysis is essential to understand the underlying incentives of key actors. Second, interventions need to be locally led in order to provide legitimacy for reform. Third, interventions need to be flexible and adaptive. Fourth, acceptance of an element of risk is necessary. Fifth, donors need to develop a new way of measuring impact.
Using Natural Resources for Development: Why Has It Proven So Difficult?
