malvernmugadzikwa
Dr Tinashe Eric Muzamhindo
A NATIONAL STRATEGY is more likely to be successful if it is the product of inclusive planning processes that are transparent and participatory.
A plan forged in an open public debate will expose policy errors sooner, constrain shoddy deals, reduce corruption and make inevitable course corrections less disruptive.
Furthermore, a clear understanding of the challenges and opportunities that exist assists governments in transcending politically driven short-termism and managing expectations better.
This ensures planning has a legacy aspect for the next generation.
National strategic planning must be focused on a comprehensive understanding of the resource sector’s full economic and social impacts. This is inclusive of positive and negative, quantitative and qualitative, national and local impacts, as well as the existing sector governance frameworks.
A platform for developing practical, country-specific, collaborative partnerships among Government, companies, development partners and civil society organisations to address capacity gaps and enhance inclusive sustainable development outcomes must also exist.
Natural resources turned into sustained prosperity
As the drive towards the fulfilment of the upper middle-class economy target continues, natural resources will play a pivotal role in the attainment of Vision 2030.
Transforming natural assets into sustainable financial, physical and human assets requires effective and transparent resource management in the following areas:
Awarding of contracts
Private-public partnerships
Structure of mining claims
Development, extraction and use of resources
Management of downstream value-added activities
Project closure and rehabilitation
At each point, the Government must act as a faithful steward to capture and maximise value, as well as regulate on behalf of the citizens. The responsibility of governments extends beyond the industry value chain and encompasses how those resource revenues are managed, distributed and transformed into physical, social and human capital for the prosperity of current and future generations.
In partnership with the private sector, civil society and global capital, the multi-stakeholder extractive industries enable governments to improve revenues from natural resources.
Resource-structured development planning
Resource governance and development is challenging across the entire decision chain and one weak link can undermine a country’s ability to benefit from its natural resources.
For example, in the extractive industry, if exploration is limited, perhaps due to misallocation of exploration rights, a country may never know the extent of its resource wealth.
Even if abundant wealth has been discovered, poorly structured concessions may yield little revenue.
Similarly, governments may raise large amounts of revenue but then squander it on poorly selected projects or subsidise uncompetitive industries.
Comprehensive planning on resource management
Broad objectives for natural resource use, including how revenues will be captured, managed and used should be laid out.
Intended beneficiaries must be identified and an institutional framework for engaging and coordinating line ministries, donors, the private sector and civil society organisations must culminate in a strategic public investment programme aligned with a nation’s vision.
Linkages with industry must seek to utilise transparent budgeting and financial management tools that are based on financial modelling of anticipated revenue flows over the medium and long term.
This should be tied to a strong medium-term expenditure framework.
This should be driven by development needs and cost-investment programmes, as well as tools to improve budget execution.
Strategic coordination — a tool for resource-based planning
A management authority consisting of key figures that include ministers of Energy; Mines; Finance; and Transport; governor of the central bank; and the head of the tax authority of a nation must be created.
The decisions of this managing authority would guide individual entities for sustainable development.
Creating transparency and accountability structures
Progressive decisions around effective management of revenues are taken in an environment of accountability and scrutiny, which is supported institutionally by relevant state actors.
All state structures must be able to support pillars of transparency within every sectoral framework to ensure that throughout the decision chain, the government is accountable to stakeholders.
For transparency to lead to effective accountability, citizens, as the ultimate beneficiaries of the country’s natural assets, must have the opportunity to use available information to monitor their government’s actions.
Practising good governance on natural resources
Land is both a natural resource that attracts investment and one that is significantly affected by other natural resource projects, such as those in the extractive industries.
In many developing countries, land poses complex problems. It is integral to the livelihoods of millions of people, inclusive of smallholder farmers, pastoralists and individuals who depend on forest resources.
Yet highly insecure tenure rights, coupled with the fact that some governments own the majority of land within their territories, means many individuals who depend on land have no legal claim to it, and are thus vulnerable to dispossession at any time.
Governments should work proactively to ensure that the governance of land resources is aligned with the national development agenda or vision of the country.
To this end, transparency in the land tenure system is essential.
This should include transparency over large-scale tenure rights, permitted transactions and transparency in the decision-making processes related to investments.
Displacement from land can devastate livelihoods, so governments must take steps to protect tenure rights holders who may be affected by investments.
Given the outsized risks posed by large-scale land extractive projects, governments should consider implementing explicit safeguards to protect land users whose interests may be affected.
Among other measures, governments should require robust due diligence by investors, while also permitting independent assessments of a proposed project’s potential impact on existing access to land.
Challenges to human and social development
Resource-based investments have not always led to human and social development.
Too often, these large-scale projects have been associated with negative experiences at the local level.
Revenues, if wisely invested, can be utilised by governments to generate broader human and social development outcomes for local communities.
In the extractive industry, companies have conventionally focused their corporate social responsibility agenda on building of schools and clinics in the vicinity of resource projects. However, the private sector should be mindful not to act as a substitute for the state.
Delivery of social programmes should, as far as possible, be carried out by the state, the visibility of which can strengthen lines of accountability between citizens and their government.
Dr Tinashe Eric Muzamhindo is the head of the Zimbabwe Institute of Strategic Thinking. He can be contacted at: [email protected]
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