Mining for Socio-Economic Development

In recent years, the discussion on mineral resources management has gathered momentum and generated a lot of interest in Zimbabwe. True, Zimbabwe is blessed with over 40 different types of minerals and other natural resources that includes wildlife, forests and tourist attraction areas. The decline in agriculture and manufacturing sectors in particular has elevated the role of mining as a pillar to socio-economic development.

120316070546-pkg-curnow-marange-diamonds-00002418-story-topMindful of the fact that minerals are finite and public resources, it is highly imperative to invest energy in initiatives that can avoid the squander of our mineral wealth. Better opportunities, in turn, can be created to bring about the much needed socio- economic transformation in the country.

Zimbabwe is reported to have vast and diverse mineral resources and is ranked among the top producers of platinum and gold- the latest being the diamonds in Marange, which were described as one of the biggest discoveries of the century. Despite all this “mineral glory”, the country has lost many opportunities to use the mineral resources for socio-economic transformation. This has been due to a number of challenges, the biggest being Illicit Financial Flows (IFFs) fanned by corruption, the menaces of Multi-National Corporates (MNCs) through tax evasion, tax avoidance, lack of institutional capacity to harness the resources and general misgovernance due to lack of openness and opacity in the sector.

The resource curse of Africa can largely be attributed to shortfalls in economic and political governance. Political instability creates fertile ground for illicit natural resources outflows to fund armed conflicts. On the economic front weak taxation and industrial development capacity has reduced the continent’s revenue. African states give tax holidays to attract investors and this has greatly reduced income from natural resources.

At continental level, Africa has also begun to ask the critical questions and the leaders have started moving towards finding solutions to the challenges faced in the mineral resources sector. The Agenda 2063 is speaking to the use of African resources to transform the lives of the African people; the Africa Mining Vision (AMV) is a great attempt towards addressing the “resource curse” associated with the abundance of natural resources and the appalling poverty levels in Africa. AMV’s value proposition is that minerals should underpin Africa’s broad based socio-economic development.

In pursuit of social and economic prosperity, Zimbabwe is undertaking a number of policy reforms for the mining sector. The Mines and Minerals Bill, Precious Stone Trade Act and the Minerals Exploration and Marketing Corporation Bill are efforts to unlock economic benefits from the mining sector. As these reviews are underway it is pertinent for stakeholders such as government, mining companies, communities and civil society to merge forces and ensure that the country gets to receive just compensation for its resources to finance development and citizens practical needs.

At the local level and as a civil society initiative, the Zimbabwe Alternative Mining Indaba (ZAMI) has emerged as a strong social accountability platform. ZAMI strives to strengthen citizen demands for accountable management and utilisation of resources by government. Held under the theme Mining Sector Reforms: A call for Economic, Social and Environmental Justice, the 2016 ZAMI fittingly had an important breakaway session on Mining for Socio-Economic Development. This session explored how mining can bring tangible economic benefits from individual level, community to national level.

For Zimbabwe, in as much as a myriad of challenges have been raised in the mining sector the bigger challenge is POVERTY with over 70 percent of the population classified as poor. The World Bank has also classified Zimbabwe as a fragile state due to very low GDP at only about US$13, 8 billion in 2015 and very high poverty levels. The huge, unsustainable domestic and external debt overhang of over US$10 billion, lack of meaningful investment both local and Foreign Direct Investment (FDI), deep state of deflation, cash shortages and infrastructural bottlenecks impede Zimbabwe from being on course to socio- economic transformation. In such dire cases, certainly the minerals in all their forms are important but to someone who does not have food on the table, the critical question is “how do we transform the minerals into tangible drivers of development?”

A number of initiatives to benefit communities and in turn “grease the wheels” for socio-economic development at national level have been put in place albeit with their own challenges and limitations. The ones that come to mind are the CSOTs in the mining communities and the CSR schemes. To a greater extent based on community testimonials, these schemes have not managed to bring about the much needed resources that can take Zimbabwe on a sustainable socio-economic development pathway. At a national level, taxes and royalties in their various forms have also failed to transform the social and economic problems bedevilling the country.

Indeed the socio-economic challenges are there and are constantly and consistently haunting Zimbabwe but the potential of the minerals to contribute to poverty reduction and ultimately development cannot be denied. Zimbabwe should be strategic in mineral resource governance and identify, which minerals are closely linked to the development of its people. These resources should be state-controlled in order to respond to the internal challenges being faced. The vision for the minerals should be clear and sound and the capacity to carry this vision should be enhanced and supported. Without putting this framework and vision in place the mineral resources can have the potential of actually causing poverty through environmental degradations, ecological debt, climate change and human rights violations as is the current scenario in many mining communities and the nation at large. In order to tap into the long lasting positive impacts of mining on socio-economic development, Zimbabwe should:

  • Deal with the legal and policy frameworks that are hindering the harnessing of the benefits of the mineral resources.
  • Assess and consolidate the economic opportunities emanating from the mining sector throughout the value chains to achieve the minerals transformative role.
  • Build the capabilities in people for long term development through mineral resources revenue e.g. focus on developing the small-scale miners and other critical social and economic sectors.
  • Paradigm shift from the current piece meal community schemes that have not worked for the general populace.
  • Ensure that mineral resources are controlled by the state where the state plays a regulatory role and redistribute mineral revenue for the benefit and empowerment of all.
  • Setting the national mining vision in motion through the lenses of socio-economic transformation.
  • Multi-stakeholder approach is required in order to build a framework/vision, which has a buy -in from a broad spectrum of the society to achieve resilient socio-economic development.
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Post published in: Business