CAPE TOWN (miningweekly.com) – A call has been made for fair, transparent disclosure around extractives in Africa and clear and open rules of engagement between governments and mining companies.

United Nations Conference on Trade and Development (Unctad) secretary general Dr Mukhisa Kituyi told delegates at the Investing in African Mining Indaba that there was still a feeling of anger over the unequal sharing of the benefits of the extractive industry in African countries.

Kituyi says one of the best ways investors in the mineral sector can assist in this regard is to develop benchmarks towards a fair agreement.

“We need to cultivate a sense of fair sharing,” he suggested, adding that governments had a responsibility to prioritise what needed to be done, from sound innovation policies in building resources assets to the fair and productive use of tax and returns from minerals which should be invested in people.

He said this was vital as Africans depended heavily on tax.

“Africa has a unique problem. Taxes are Africa’s largest source of public revenue, more than anywhere in the world. This makes people in Africa very vulnerable to taxation.”

He said a transparent tax regime was essential.  Lopsided agreements between mining companies and politicians may work in the short term, but were not fair or sustainable.

Kituyi, who is a former Kenyan Minister of Trade and Industry, said Unctad was helping the African Union Commission work with Presidents in Africa to agree to basic principles on transparency in the type of contracts they sign.  He said some African governments were unaware of how much was being mined out of their countries by foreign investors. They rely simply on trust, but do not know the figures.

“Building the capacity to monitor is a major step that countries have not taken. Institutions of governance have been horribly wobbled. Governments don't quantify what they are getting from extractors.”

Kituyi said it was important to publish the nature of contracts. “This creates the condition in which extractives are not the basis of political wars, which we’ve seen in Central Africa in the past 50 to 60 years.”

More generally, he said, African countries were grappling with changes flowing from trade liberalisation.

“Under globalisation, there has been massive liberalisation panic in weak developing countries.” He said trade-related revenues and customs duties had dropped without a rise in public revenues.

Further, while exports from Asian countries had climbed, Africa’s exports were stagnant. In 1995, Africa exported $68-billion of manufactured goods. By 2014, it was moving only $90-billion of manufactured goods.

New challenges had also popped up.

“How can African governments tax Uber? How can governments that have relied on taxing hotels get their fair tax on AirBnB? The community of international engagement has not adequately worked out how to help those that are falling behind.”

On the hotly debated migrant issue, Kituyi said migrants had a huge amount to offer.

“Hopefully our shared engagement to use policy and fair minerals to build human capital will see the next generation of migrants fly jets across Silicone Valley and not travel in boats to Malta.”