Thursday, July 24, 2014

WHY AFRICAN MINERAL POLICIES ARE NOT AFRICAN?





By Dr Antipas Massawe, 

One: Playing big cats (developed countries) in a field dominated by big cats (developed countries) when small cats are what developing African countries are.

Most African Mineral Policies  are not delivering national expectations most effectively due the non-African reliance on private sector led mining sectors they are built for when indigenous private sectors are still underdeveloped, incorporate negligible fractions of their local populations through stock markets and lack global competitiveness in mining business.


Without own private sector mining capacities, mineral policies built for private sector led mining sectors always lead to the evolution of the foreign dominated mining sectors we see exporting mineral revenues and minerals in the form of raw materials from Africa and contributing very little in the form of royalties, taxes and handouts to the African economies.

Such mineral policies may serve national interests in the mineral rich developed countries like Canada, Australia and the United States of America (USA) which have own global competitive private mining sectors  which incorporate most of interested and well funded citizens through stock markets.
For the mineral rich African countries, mineral policies should be built for the self-reliance obtainable from Governments investing in their mineral sectors (they should include in their investment priorities) to empower local participation and maximize their shares of mineral revenues for re-investing in the development of indigenous private sectors, and continue the investing till the indigenous private sectors develop into dependable public forces which are global competitive and incorporate majority citizens through stock markets.

Emulation of mineral policies in the national companies led mining sectors in mineral rich middle economies like India, Brazil and Argentina is what mineral rich African countries could have done.
While African countries are playing Canadian and/or Australian and/American and loosing,  the Chinese are playing Chinese, the Australians Australian, Indians Indian, Brazilians Brazilian, Russians Russian and all  wining.


When competing with the mineral rich developed countries, mineral rich developing countries should play the developing countries style rather than the style which makes developed ones competitive.


Two: Forcing small cats (citizens in the developing African countries) to compete for their  own food (mineral resources) with a herd of alien big cats (the powerful foreign mining companies).
Most African Mineral Policies violate citizens rights of heritage on the mineral resources of their countries when they allow the Governments to treat citizens and foreigners on equal terms (same rents and taxes for mineral rights) as if minerals in the African countries are properties of the African Governments and/or foreigners and Africa citizens have same rights of heritage on the minerals in African countries.

Such treatment may serve national interests in mineral rich developed countries like Canada, Australia and USA which are equipped with global competitive private mining sectors which win abroad if lose at home and the other way round.


I would describe the treatment of citizens and foreigners as having equal rights of heritage on minerals in the African countries as a deliberate avoidance of African Governments responsibility to empower their citizens and enable them to participate in their mineral sectors and/or deliberate acts of the African Governments to drive off indigenous private sectors in favour of the foreign domination for taxes rather than taxes plus profits.
African Mineral Policies should created rents and fiscal regimes which favour indigenous private sectors and their partnerships with foreign mining companies to take lead against the foreign domination which carry very minimal benefit to the mineral rich African countries in terms of skills transfer and mineral revenues.


Three: Non involvement of citizens in the decisions reached by their Governments and the foreign mining companies in the development of mineral resources in African countries.
Most African Mineral Policies violate citizen rights of heritage on the mineral resources of their countries when they allow the African Governments to endorse large scale Mineral Development Agreements without any involvement of the citizens and in secrecy as if minerals in the African countries are the properties of the African Governments. Instead, African Mineral Policies should have required the citizens to endorse large scale Mineral Development Agreements through a majority vote of their Parliaments before the Governments could sign them. Such approach enables the multiple view of brain diversity in their Parliaments to eliminate all flaws and generate flawless Mineral Development Agreements which benefit the mineral rich African countries most effectively.


African mining which is African is obtainable from African Mineral Policies which are founded on Governments investing to support increased local participation; variable rents and taxes which favour local and their partnerships with foreigners against foreign domination; and involvement of citizens (through their Parliaments) in the decisions involved in large scale Mineral Development Agreements.


Governments’ investing to support their private sectors in developing countries is justifiable because it is parents helping their children to survive competitions in a field dominated grownup competitors.

Same way developed countries decided to import goods from some developing countries free of import-duty knowing that children (developing countries) won’t survive without the favour or become a threat with it in the open market dominated by grown-ups(developed countries).


When sharing with the mineral rich developed countries, mineral rich developing countries should deploy mineral policies which work for developing countries rather than the mineral policies used in developed countries.

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