Africa Must Manage its Resources

(PANA)--Minerals development has surfaced on Africa’s economic map over the past few years, with increased oil production in particular underpinning high growth rates in oil-exporting countries. But the situation on the ground is not as rosy as depicted by experts in different accounts on the economic environment of mineral-rich African countries.

In its economic report on Africa 2008, the UN Economic Commission for Africa (ECA) said six of the top performers were oil or mineral rich economies -Angola, Sudan, Egypt, Equatorial Guinea, Mozambique and Tanzania. The structure of the remaining top performing economies, the report said, is heavily dominated by agriculture in Ethiopia and Malawi, or services in The Gambia. For the common man in these countries who has noticed no tangible change in his life and is caught in desperation and poverty, top performance is simply a meaningless and perplexing economic jargon. Politicians who use development statistics in campaigning for election also find it difficult to convince their constituents about the growth of their economies while foreign mining conglomerates siphon the real wealth.

It is against this background that Africa has started considering adoption of a long-term vision of up to 2050 on better management and utilisation of its underground wealth. Ministers responsible for mineral resources development are due to meet in Addis Ababa, Ethiopia, from 8-13 September 2008 to work out an action plan with that goal in mind, as the recent discovery of more mineral deposits has turned Africa into a magnet over foreign exploiters. The first segment of the conference from 8-10 September will be for senior officials while the ministerial session will hold from 12-13 September 2008.

Jointly organised by the African Union commission in collaboration with the ECA and the African Development Bank (AfDB), the conference will recommend to African leaders a strategic vision and action plan for using natural resources to promote economic growth, reduce poverty and achieve sustainable development. According to the AU commission, the ministers will consider the adequacy of the mining regimes currently in place in Africa as instruments to promote broad-based development on the continent.

Natural resources are important assets for Africa’s development and need to be properly managed. A conference that was co-organised in the Ethiopian capital in February 2007 by the ECA and the AfDB on the same issue agreed that Africa must own its development process and strengthen governance systems and institutional capacity for contract negotiations. Other key recommendations of that meeting were that natural resources governance should be mainstreamed into poverty reduction strategy programmes, national parliaments and independent committees be involved in oversight of the sector, and Africa’s mining regimes reviewed in order to provide more options and benefits for States from extraction of their mineral resources. For African countries to strengthen their bargaining position when negotiating better terms from external partners and clients, the meeting recognised the urgency of putting priority on geological mapping and natural resources inventories.

The forthcoming ministerial Conference, centred on the theme ‘Building a sustainable future for Africa’s extractive industry: the imperatives’, is expected to examine several issues that include evaluation of the requirements to develop African codes and guidelines for the improvement of governance, transparency, environmental stewardship, and social safeguards in the development of natural resources. Also, the ministers will discuss the mechanisms for ensuring inter-generational equity, including the use of funds for future generations; and strategies to enhance the value linkages between the natural resources and other sectors of the economy.

Besides the ministers, the conference will bring together representatives of African chambers of mines and industry, private sector, academia and non-governmental organisations as well as UN agencies. African countries are well aware of the paucity of indigenous capacity and the wherewithal for developing the mineral sector on their own. This is the most glaring handicap they need to clear away before advancing their ambition. As the old adage goes, however, where there is a will there should be a way.

What Africa needs most at this time is integration of its economies and creation of jobs to stem the tide of its young workforce migrating to other continents, so that they could use their skills in the development of promising economic sectors such as the minerals.

It is expected that the ministerial conference will lead to organising a round table with chief executives of the world’s top mining companies at which Africa will drive home the resolve to be a master of its destiny in the development of its mineral resources. It will make economic sense if executives of mining firms that have set up some base in Africa consider relocating other processes on the continent. Further delay to take such measures would risk infuriating the local people, who have been displaced and have lost traditional livelihoods and ancestral lands to give way to luxurious mining townships.

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