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We are failing to cash in on boom: UN



A recently published report has argued that Africa has so far failed to benefit from the commodity price boom, although opportunities were still there.
The commodities boom offered the chance to increase tax revenue at the very least, the ‘Minerals and Africa’s Development’ UN report stated, and said that governments of mineral countries such as Namibia had the opportunity to negotiate more favourable licencing and tax regimes.
African governments could even consider equity participation in mining ventures or new State entities, but the report stressed that these had to operate commercially and in competition with private firms.
The report, compiled by the International Study group for the UN Economic Commission for Africa, stated that the continent’s mining industry still resembled an enclave in the global economy, but that a new direction was being sought through the Africa Mining Vision (AMV).
The AMV was conceived in preparation for the first African Union Conference of ministers responsible for mineral resources development in 2008.
Most of the industry had weak links with the rest of the national economies, while the mines’ ownership and operation were still largely in the hands of foreign companies. Most of the minerals were exported in raw form and the industry imports most of its inputs from abroad.
The report argued that the enclave mineral economy was a colonial legacy that post independence resource nationalism failed to redress. Subsequent World Bank-promoted reforms, which were designed to attract foreign private risk capital, eliminated the state’s direct role in production and further entrenched the enclave economy.
This led to the search for a new approach in which minerals could assist the development approach of nearly all African countries, which accelerated after the start of the commodity-price boom around 2002.
The central premises of the report and the AMV were that mineral operations must constantly be re-evaluated for its contribution to broad and long-term development goals; that mineral operations need not and ought not to be enclave activities; and that restructuring African mining from its enclave nature was the fundamental task of African policymakers and those committed to having it play a transformative role. Further, optimising the mineral linkages needed a conscious policy approach.