The Sunday Mail
Darlington Musarurwa Business Editor’s Brief
AFRICA is clearly a forgiving continent. It has to be. Forgiveness is engraved in its DNA.
Otherwise how else can one explain the fact that 400 years after more than 13 million African souls were shipped to the Caribbean islands, North and South America, including Europe, as commodities for resale, Africa is still prepared to look the other way.
Talk of reparations for this vile form of trade whose lingering effects are still apparent to this day has faded.
Only the Caribbean community (Caricom) is still stubbornly pursuing the matter, pressing the principal slave-owning nations of Europe – Britain, France, Portugal, Spain, the Netherlands, Norway, Sweden and Denmark – to relent.
Caricom, which is being represented by UK law firm Leigh Day – the same law firm that forced Britain to pay out close to US$4 000 each to the 5 228 Kenyans who were tortured when the Mau Mau rebellion was ruthlessly crashed in the 1950s – intends to use the United Nations Convention on the Elimination of Racial Discrimination as the platform to negotiate, but it is equally prepared to escalate the matter to The Hague.
Unsurprisingly, it seems most of these nations are not prepared to pay.
The UK, for example, is not prepared to listen to disputes lodged before the court for the period preceding 1974.
Absurdly, while Britain is not prepared to listen to some of these cases, the European country, which banned the slave trade in 1807, paid over £20 million to Caribbean slave owners for the loss of “human property” after the trade was outlawed.
At current rates the £20 million fee is estimated to be equivalent to between £16,5 billion to £76 billion.
At some time in the late 1990s, a US$777 trillion reparation demand – a wild demand by any stretch of the imagination – was made for Africa, but the voices soon became mute.
The slave trade is now bygones; a distant, painful memory, but stories that are romanticised around it continue to generate a fortune for Europe and America.
Last year’s popular film, 12 Years A Slave, based on the memoirs of Solomon Northup who was sold to plantations based in Louisiana, generated more than US$187 million.
Sadly, Africa doesn’t own its own stories.
Well, that seems to be a closed chapter.
However, through the abolition of slave trade, it was only human beings that were declassified from being considered as “property” or “commodities”: the outflow of mineral resources continued, and it has continued to this day.
Author and historian Raymond E. Dumett in his book “El Dorado in West Africa: The Gold-Mining Frontier, African Labour, and Colonial Capitalism in the Gold Coast, 1875 to 1900”, actually claims that the gold trade flourished before and during the trans-Atlantic slave trade, which it outlasted as well.
In fact, the imposing forts and castles along the west coast of Africa, which became iconic landscapes in the slave trade, were built in preparation for the trade in gold.
Zimbabwe, as many Southern African countries that lay beyond the tentacles and reach of the slave trade, also experienced a significant haemorrhage in its mineral resources, especially in the period after Cecil John Rhodes deceived King Lobengula into signing the Rudd Concession on October 3 1888.
By ceding land, labour and, most importantly (in light of this discussion) minerals, the Rudd Concession effectively heralded the beginning of the exploitation of local mineral resources.
For the 92-year period leading to 1980, minerals (non-renewable resources in nature) of various forms, shapes and sizes were hauled from beneath the earth and exported to foreign lands.
And the country has not benefited to any significant degree.
All along white capital has been feasting from proceeds of local mining activities.
Academic Alois S. Mlambo in his book “A History of Zimbabwe” noted that by 1978 the mining sector was dominated by conglomerates such as Anglo-American, Rio Tinto, Messina Transvaal, Johannesburg Consolidated Investment, Union Carbide and Turner & Newall.
Some of these huge conglomerates still pay a key role in the sector.
But, as is happening elsewhere across the globe, Government is now rightfully claiming ownership of its non-replenishable resources.
The phenomenon, which has come to be known as resource nationalism, has heightened conversation over reclaiming local resources and using them as leverage to negotiate deals with investors.
This is quite a seismic shift from guided post-colonial conversations that were mainly rooted in trying to be more accommodative to foreign investors, particularly in the mining sector, notwithstanding the fact that foreign investors were already receiving the long end of the stick.
It is scandalous that all along policymakers were being swayed by powerful corporate lobbyists into further incentivising companies that are taking our resources for a song.
Much talk has been about introducing tax rebates on the import of capital goods used in exploiting local mineral resources, tax holidays for dividend payments, including various other policy reviews in order to “lessen” the burden for the investors.
What crap!
Currently, there is a crusade to force Government to review the obtaining mining fees.
Government hiked the charges in 2011 and 2012. Zimbabwe levies a 15 percent royalty on diamonds and 10 percent on platinum, while gold attracts a 7 percent charge.
Experts claim that prior to the review the country had one of the lowest taxes and royalties’ system.
Forces that are pushing for the charges and fees to be downwardly reviewed draw comparisons with Angola, which charges a 5 percent royalty on both diamonds and platinum.
Botswana also charges 10 percent on both diamonds and diamonds.
However, they also conveniently fail to mention that while Zimbabwe charges 7 percent for gold, in Botswana and Mozambique the charges are pegged at 10 percent.
But the royalty system has over the years been exploitative as it has not been making any meaningful contribution to the fiscus.
Last year, Government managed to bag US$133,7 million from this tax head against a target of US$245 million.
Again, Treasury is unlikely to fare better as only US$79 million was realised in the first three months of this year.
Encouragingly, Zimbabwe has thus far been unyielding, tirelessly pushing through models designed to reclaim ownership and revenues generated from the mining sector.
Yes, Government needs to put its foot down as enough resources have been spirited away by avaricious and canning investors.
Government has to be strong a negotiator
Ownership models need to continue to be adjusted in order to suit both circumstances and experiences.
Recent experiences in the diamond mining sector, where Government insisted on joint venture partnerships with investors, have only served to reveal how sleek and sophisticated the private sector is.
Not much revenues have found their way into the State’s purse.
But this is hardly surprising because the private sector has over the years managed to develop financial engineering techniques that allow them to reduce their obligations to the State.
In some instances, recurrent expenditures and capital expenditures have been inflated, with proxy companies in foreign lands charged with supplying most of the companies’ needs.
It is comforting to note that Government has decided to review some of the empowerment deals signed in the mining sector.
It seems that the running thread in most of the deals was for Government to pay for the stakes it was earmarked to receive from mining houses through its share of dividends from mining operations.
Worryingly, most of the mining houses have never declared a dividend in the history of their operations in Zimbabwe, and it would have taken forever for Government to settle its debt.
The production sharing model that is now being touted, however, presents an ideal model for a win-win and sane arrangement with investors.
In essence, the model ensures that investors are able to amortise their capital expenditures as well as operational expenditure from proceeds accruing from mining.
After the amortisation, Government and the investor will then share proceeds from production at a ratio that has been predetermined.
But some of the companies have fully recovered their initial capital investments already and it is therefore magnanimous for Government to consider this route for them.
It seems that much of Government’s shortcomings have been in negotiating and monitoring activities of local mining companies.
It is believed that despite the glare provided by the Zimbabwe Revenue Authority (Zimra), the Zimbabwe Mining Development Corporation (ZMDC), the Minerals Marketing Corporation of Zimbabwe (MMCZ) and other authorities to try and ensure transparency in Chiadzwa, diamond mining firms have been successfully running rings around the lot.
Government, therefore, has to be vigilant and proactive in ensuring that our minerals work for us.
Policymakers need to move, even with obscene haste, to address these anomalies.
A lot of minerals continue to be exported abroad without translating into any meaningful value for Zimbabweans.
Indonesia, which, ironically, is the first country to implement the production sharing model, recently banned the export of nickel ore.
Far from what the prophets of gloom and doom had predicted, the country has now succeeded in attracting Chinese investors to build smelting plants meant to add value.
Zimbabwe has similarly banned the export of chrome ore and is planning to do the same for the platinum mining sector.
So Government does not have to relent; it has to forcefully push through its sovereign claim over the country’s mineral resources.
The continued unfettered export of our minerals without any demonstrable gain must stop.
If African economies are to make sense, this unchecked injustice, just like the slave trade, has to stop.
But this needs a collective effort from all proud Africans.
