The Sunday Mail
Enacy Mapakame in LUSAKA, Zambia
LACK of clear, tangible and verifiable knowledge has betrayed Africa’s ability to benefit fully from its mineral wealth, exposing the mining sector to exploitation by the West, Southern Africa Resource Watch director Dr Claude Kabemba has said.
Poor negotiating skills, corruption and illicit financial flows are also considered as reasons pushing the continent to the bottom of the social and economic ladder.
Addressing journalists at the Open Society Initiative for Southern Africa Journalism Summer School 2014 in Lusaka, Zambia, recently, Dr Kabemba said Africa occupied the basement of the world’s poorest economies due to inadequate geological research and knowledge of its mineral resources.
Dr Kabemba cited Zambia and Zimbabwe as some of the countries whose communities lived in poverty amidst abundant mineral wealth.
“Very few countries in Africa know exactly what mineral resource they have and their value. This affects their ability to negotiate deals with investors,” he said.
“Go to Ngezi, for instance, there are truckloads of platinum going out, but ordinary Zimbabwean communities have nothing to show for it,” he said.
The Africa Mining Vision calls for a knowledge-driven African mining sector that catalyses and contributes to broad-based growth, fully integrated into a single African market through downstream linkages into mineral beneficiation and manufacturing.
It also emphasises on a mining sector that plays a major role in competitive national, continental and international capital and commodity markets.
Comprehensive knowledge of the continent’s mineral endowment is crucial for the mutually beneficial partnership between African governments, private sector, local communities and other stakeholders, according to the vision.
Africa holds large deposits of minerals ranging from gold, diamonds, platinum, coal, gas, copper, nickel and chrome.
The resources have been fleeced by multi-national corporations developing their home countries in Europe and North America.
Dr Kabemba said low capacity for value addition was also prejudicing the continent of billions of dollars annually. Africa exports raw materials and imports finished goods made out of the same minerals but at higher prices.
In Zimbabwe, Government last year launched Zim-Asset, a five-year economic blueprint which emphasises on value addition as one of the pillars that propel economic growth. It is believed the value that leaves the continent is 10 times greater than what comes back in the form of investments and profits.
The mining sector became Zimbabwe’s leading export sector, accounting for over 60 percent of total export earnings with a GDP contribution of around 18 percent.
But the sector’s contribution to the fiscus remains lagging behind owing to alleged transparency and accountability loopholes in Government.
Dr Kabemba chronicled how extractive resources from Africa oiled the industrial revolution in Europe, while the continent sank deeper into poverty, disease and environmental damage.
He pointed that such capitalistic tendencies were still prevalent among multinational corporations who are benefiting more from the continent’s resources.
For instance, big mining companies are listed on foreign bourses to unlock value in their home countries and keep revenue circulating amongst themselves.
Platinum giant Zimplats’ parent company Implats is listed on the Australian Stock Exchange, while the country’s largest gold miner, Metallon Gold, has its parent company Metgold listed in London.
“Companies were sold at cheap prices with tax exemptions to attract investments. These companies promised to create employment, but they did not.
“Zambia did the same, although copper production improved from 250 000 tonnes to over a million after privatisation, with revenue rising too, communities have nothing to show for it,” said Dr Kabemba.
He added it was difficult to see link between mineral wealth and the rest of the economy as unemployment continued to rise in Africa. Reforming the extractive sector to ensure Africans benefit from their resources would be a crucial step towards improving the status of the continent.
