Africa needs new models to better share mining benefits

  By Godfrey Mutizwa, CNBC Africa anchor

Africa, home to the world’s largest deposits of precious and industrial metals, needs new mining models to equitably share its mineral wealth while industrialising.

Paul Jourdan of Mining Equipment Manufacturers of South Africa and a policy analyst, said current models left Africa with little to show for its resources, citing the example of the Democratic Republic of the Congo which he said realised about three percent of the value generated by its mineral exports.

“The focus should be on the minerals that Africa requires for its development and not what the global economy needs,’’ Jourdan told the African Union (AU)’s inaugural African Forum Mining in Accra, Ghana. “The state’s obligation is to get the optimal value of the assets on behalf of the people.’’

The forum is part of the AU’s strategy to help African countries get more out of their mineral wealth through beneficiation, strengthening the capacity of governments to negotiate with multi-national companies and ensuring communities benefit from those resources as outlined its decade-old African Mining Vision (AMV).

Working with the United Nations and pan African institutions such as the African Development Bank, the AU has focused on creating key mineral value chains and supporting governments in mining policy reforms that will enable economic integration and industrialization as part of its Agenda 2063 and enabling the recently launched African Continental Free Trade Area (AFCTA).`

“The AMV seeks to encourage African countries to recognise the massive benefits to be garnered by mining countries if they look beyond the rents they now get from mining companies, and by setting in motion the huge linkages which exist at every level of extraction, to allow for maximisation of benefits,’’ Paul Msoma, Economic Affairs Officer, at the United Nations Economic Commission for Africa, said at the opening ceremony.

“It is a call to move beyond mere revenues collected as taxes, which are meager anyway, and move to a situation where whole industries are spawned to service the mining sector, creating jobs for more people all along the value chains, at the same time as issues of environmental protection, gender and youth inclusive development, community equity and artisanal and small-scale mining are taken care of.’’

The AU also seeks to better involve the private sector in its economic development plans like the AFCTA after realising mistakes of the past, said Antonio Pedro, UNECA Central Africa Regional Director. “It used to be a taboo for the AU to engage the private sector,’’ he said, suggesting earlier collaboration would have helped revolutionise skills development.

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