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Streamlined, transparent system key to unlocking Africa’s mineral resources value – AU

17th February 2017

By: Ilan Solomons

Creamer Media Staff Writer

     

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It is important that African mining industry stakeholders start initiating dialogue on how to build a better governed and progressive minerals sector that will contribute to the continental vision of resource-led industrial development guided by Agenda 2063, urged outgoing African Union (AU) Commission trade and industry commissioner Fatima Haram-Acyl.

She was addressing delegates at the 2017 Mining Indaba Ministerial Symposium last week. Acyl emphasised that the AU’s Agenda 2063 “clearly and specifically” called for coordinated, coherent and harmonised approaches in harnessing Africa’s mineral resources.

She noted that Agenda 2063 was a strategy to optimise the use of Africa’s resources to benefit all Africans, which African heads of State and government adopted in 2015. Acyl said that the initiative was a strategic framework for the socioeconomic transformation of the continent over the next 50 years and was intended to lead to inclusive growth and sustainable development.

“As a blueprint for generations to come, Agenda 2063 places greater importance on issues of collective partnerships, ownership and the roles of various stakeholders in helping realise the objectives of a unified continent that is able to drive its own development agenda in a way that is inclusive, transformative and equitable in its processes and outcomes.”

The commissioner highlighted that these goals lay at the heart of the Africa Mining Vision (AMV), which is a continental strategy for the transparent, equitable and optimal exploitation of Africa’s mineral resources to underpin broad-based sustainable growth and socioeconomic development.

She noted that this situation was what former AU chairperson Dr Nkosazana Dlamini-Zuma termed the “African Paradox”. According to the former AU chairperson: “Africa is loaded with raw materials and oil that the world needs in its manufacturing to power itself and, yet, we are unable to provide jobs and economic opportunities for the millions of young men and women that each year join our labour markets. The paradox of an Africa of lakes, fertile land, forests, wildlife, livestock and oceans and, yet, we have children stunted by malnutrition, while we continue to import 83% of the processed food that we consume.”

Acyl said that, in recognition of these challenges, Agenda 2063 built on and sought to accelerate the implementation of past and existing continental initiatives for growth and sustainable development, such as the AMV, the Action Plan of the Accelerated Industrial Development of Africa (AIDA) and Boosting Intra-African Trade (BIAT).

She remarked that, in addition to specifically addressing the challenges preventing African countries from fully benefiting from their natural resources, the AU had developed a Commodities Strategy. Acyl commented that the AU had recognised the transformative role that mineral resources could play in the much‐needed commodity-based, industrial development. She said that the role that minerals could play was an important role contributing to Africa’s development agenda through strengthening intra-Africa trade, which stood at 16% in goods and services.

Further, the commissioner commented that an effective mineral-led industrialisation strategy would, therefore, require new ways of looking at Africa’s rich minerals and metals endowment.

“Achieving the transformative potential of Africa’s resources requires a new way of thinking about minerals which aligns with the continent’s owned priorities of industrialisation and diversification through value addition, processing, beneficiation and the creation of strong mineral-led linkages with other sectors of our economies,” she stated.

Acyl remarked that a critical aspect of Africa’s industrial development was the need to challenge the current approaches that considered and framed Africa’s minerals as raw materials for strategic industries in western and eastern countries.

The commissioner said that the Mining Indaba was taking place at an “uncertain time”, even though commodity markets appeared to have started tightening again after their recent slump, which continued to negatively impact on the fiscal position of many resource-rich economies in the region. “African governments and all stakeholders, should, therefore, commit to transform their budgetary and developmental challenges into opportunities for diversifying their economies in accordance to their commitment to implement the AMV,” urged Acyl.

Moreover, she emphasised that it was “imperative” that African leaders focused on strategies that could help Africa “unleash”, in a sustainable manner, the strong potential for intra-Africa value addition of its minerals.

The commissioner contended that it was time Africa identified ways to strengthen resource-led social and economic linkages. “We need to agree on common investment rules that bring the race to the bottom to an end as we compete among ourselves to attract investment from within and outside the continent.”

Acyl added that African countries needed common rules on competition policy, regulatory systems, fiscal regimes that provided comfort for small-scale miners in a way that they would not feel dominated by the big mining companies. “We also need to curb illicit financial outflows from the continent and the sector, which averages more than $50-billion yearly,” she lamented.

Acyl revealed that this would be the last time she would be addressing the Mining Indaba in her position as AU trade and industry commissioner, as she was stepping down from the position following the conclusion of the conference.

The commissioner recounted that, since the inaugural AMV Day in 2014, in which Dlamini-Zuma had participated, the AMV Day had become a permanent fixture of the Mining Indaba.

“It is my hope that it will continue to grow and flourish as the forum where the private sector and African governments can meet each year and discuss challenging issues within the sector and seek sustainable solutions,” Acyl stated.

She commented that the uniqueness of the forum lay in the fact that it provided a space for frank, open and free high-level political dialogue that would help both the private and public sectors achieve their goals through shared benefits.

“It is my fervent hope that my successor will continue to give this event his utmost support and guidance as we have done in the last four years and help it grow to become an institutionalised feature of the annual Mining Indaba,” Acyl concluded.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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