Africa’s mining vision critical for development

mineral resources contribute meaningfully to the continent’s development, says a top United Nations Economic Commission for Africa mining policy analyst.
“The mining sector has failed to contribute to Africa’s development and African governments need to reform the sector now to benefit its own people,” said Mr Oliver Maponga, a UNECA mining policy analyst.
“The African Mining Vision 2050 identifies natural resources especially mining as a key sector to spur development and industrialisation of the African economy.
“From process to content, the vision answers questions why Africa has not developed despite the enormous natural resource endowment of the continent and its long history of mining.”
Mr Maponga said this at a regional strategic meeting on the African Initiative on Mining, Environment and Society which was held recently in Harare to share experiences and mobilise Africans around the reform agenda.
“Africa has a long history of mining but sadly when we look at the human development index Africa is at the bottom. Australia, Canada, Norway and other industrialised countries used natural resources to propel development and build industries around mineral extraction.
“We can do the same and transform our natural resources into concrete development to improve the quality of life of the average African,” said Mr Maponga.
Zimbabwe Environmental Law Association director Mr Mutuso Dhliwayo said “shocking poverty” existed around areas where extraction was taking place in Zimbabwe.
“Local communities are not benefitting anything at all. Foreign investors are earning disproportionate benefits compared to host countries and their local communities,” he said.
He said there was need for greater transparency in the relations between companies and national governments over the transfer and use of mining revenues, accountability to local communities and environmental degradation.
Mr Maponga chronicled the colonial legacy of mining in Africa, mining in the 1980s and 90s characterised by a fall in metal prices, the free mining regime era from 1990 to 2000.
He also focused on the post 2006 period when African government realised the need to reform the sector after the failure market liberalisation policies.
“In the last few decades African governments followed economic reform programmes based on the primacy of self-regulating markets. These severely reduced government involvement in mining and concentrated on the attraction of foreign investment for promoting development.
“These strategies have failed to address the key structural constrains in the African economies, structural change and diversification. This has trapped Africa in the primary commodity export dependence,” he said.
Participants at this meeting noted that the disproportionate accrual of benefits has sparked demands for a re-examination of the incentive regimes enjoyed by foreign mining companies.
“The impact of mining on local communities is devastating. We must push for a mining agenda that respects the needs and interests of the local communities,” said Dhliwayo.
“The violation of rights, destruction of livelihoods and environmental degradation needs to be addressed fully as a response to concerns raised by mining communities.”
The African Union and UNECA launched the African Mining Vision in 2007. The visions outlines what needs to be done to transform the continent’s natural resources into development across the continent by 2050 to improve the quality of life of an average African.
Most African countries have not been able to take advantage of their natural resources to underpin diversification, growth and development due to weak governance systems, poor collateral use of resource infrastructure, failure of upstream and down-stream value addition, labour shortages and poor investment in research and human resources development.
The African Mining Vision seeks to correct these failures of the past including present challenges.
“In the last five to six years metal prices have been going up, profits for mining conglomerates have been increasing and African government could not touch any of the benefits from the profits realised,” said Mr Maponga.
“We need to re-engineer these mining regimes to capture these excess profits to benefit our people. Free mining regimes are not working to our benefit and we must stop this race to the bottom where African countries are undercutting each other to offer generous incentives to mining with no benefiting accruing to their people in return.”
The African Mining Vision proposes increased investment in improving the resources infrastructure, improving contract negotiation capacity, enhancing capacity for auditing, monitoring, regulating and improving resource exploitation regimes and developing the resource sector linkages into the domestic economy.
Increasing the capacity to manage resource rents and allocation of portions of central government mineral revenue to local mining communities is critical.
“Mineral deposits can dwindle and the economy of any local community which depends heavily on mining could over time grind to a halt if the use and management of the community’s share of revenues is not planned and invested properly,” Mr Maponga said.
“Economic diversification to avoid creation of mining communities which degenerate into ghost towns after exhaustion is critical. One of the major issues addressed by the African Mining Vision document is how to create and sustain mineral wealth without compromising environmental, social and cultural considerations.”
The African Mining Vision Action Plan is still being developed and prospects are high that it will be adopted by 2012.
One participant said the successful implementation of the African Mining Vision 2050 hinges on strong political will.
“Our governments must continually pledge to implement the African Mining Vision or else it will gather dust while discontent simmers in local mining communities dotted around the continent,” he said. Participants at the regional meeting were drawn from 15 African countries in which AIMES has a representation. ZELA and the Third World Network-Africa organised the strategic meeting.