A citizen’s voice on Natural Resources Governance

I long for an African Government that has teeth, teeth to rip through the activities of large multinational conglomerates who are abusing and stealing Africa’s immense natural wealth, while the continent, to be specific, my own country Zimbabwe, perishes on the rocks of economic malaise, and from the resultant want and hunger.

Masimba Manyanya 

It is intriguing that the advocacy for economic justice always appears to circumvent the real culprits behind our demise; the large Multi-National Corporations (MNCs), particularly those in the extractive sectors. Yes public corruption is rife, and it is certainly part of the matrix of problems that beleaguer Zimbabwe. But it appears inadequate attention is given to the root cause of the corruption; the filthy rich MNCs, who have so much money they can corruptly resolve any hindrance they may face with an African Government. Why does conventional economics seem to hate the African person when it comes to the activities of these so called large investors?

Firstly, Africa needs a consistent flow of resources to finance national budgets and private investment through progressive, rather than regressive tax regimes. Importantly, Zimbabwe has abundant land, but this resource is meaningless if it is not managed with wisdom. For my dear country, Zimbabwe, this means my government should review corporate and direct taxes upwards, reducing indirect taxes, and building tight policing and governance structures that plug illicit financial outflows and corrupt tendencies.  For the ordinary citizen, it means the more you earn the more you pay. For large conglomerates this entails reviewing mining concessions and other such agreements. If corporate taxes on mining conglomerates alone could for instance be raised to 30% from the current low levels of 15% and below (calculated in terms of the net value of minerals extracted), the budget itself will rise from its $4billion to $6billion or more. Higher budget inflows mean less borrowing, and less public debt.

I long for the government that prioritises and protects the interests of citizens in their different capacities or constituencies as workers, residents, diasporans, farmers, or as children, the elderly and the dependent. For such a government, every policy is a model intervention that lifts livelihoods to new levels of hope, opportunity and progress. This is particularly so in terms of the economy. Economic policy creates opportunities for a nation to flourish, implying that the Gross Domestic Product (GDP) must grow faster than population needs, in the form of food, water, shelter and clothing; the basic elements for human survival.

In the hands of the uninspired and the mischievous however, an economy easily becomes an instrument of mass destruction. The Government that I long for is one that prioritizes economic interests of citizens, and recognizes the importance of consultation and innovation.

Southern African economies largely depend on the activities of large conglomerates in the extractive sectors. But these large companies in Africa, and specifically Zimbabwe, take away home income that is more than 10 times the country’s GDP. Experts say Africa has in its substrata 10% of the world’s deposits of natural resources. Studies also show that  in 2016 multi-national companies control more than $1.05 trillion worth of African resources in just 5 commodities; oil, gold, diamonds, coal, and platinum. The resources controlled by the 100 companies include 6.6 billion barrels of oil,(valued at $276 million ), 79.5 million ounces of gold ($134 million), 699.3 million carats of diamonds ($134 billion), 3.6 billion tonnes of coal ($216 billion), 287 million ounces of platinum ($305 billion), as well as vast quantities of gas, copper, cobalt and silver. These same companies don’t, in real terms, pay taxes to African Governments, as they are actively associated with tax avoidance schemes, in addition to pollution, killings of citizens, population displacements and relocations, and labor rights violations.  It is depressing to look at these figures with Zimbabwe’s minuscule GDP by comparison, which is less than $5 billion per annum, and the public debt which is reaching towards $10 billion.

In 2016 Zimbabweans stood in awe as the President of Zimbabwe revealed that the nation lost an estimation of US$15 Billion diamonds revenue, supposedly through illicit activities, outright thefts and tax evasions. The painful reality however is that two thirds of the world’s poorest people are found in Africa. My Government should learn from what is happening in other countries and take strong measures to recover the billions that the country is losing through tax evasion. The Government I want should in particular review various mining and other concessions, with a view to raising corporate and direct taxes as well as building tight governance and policing mechanisms that plug illicit outflows.

In dealing with exchange rate challenges, Zimbabwe and other countries in the region must come to realise the importance of regional groupings such as SADC in setting primary producer prices.  Regional groupings allow countries to reposition themselves competitively on global markets, and in manner that protects important domestic interests.  The Organization of the Petroleum Exporting Countries (OPEC) principle in the Middle East sets a fine example of effective economic grouping. Through such groupings as SADC, countries stand to benefit immensely from favorable prices of primary products such as minerals countries in SADC stand to benefit immensely from favourable prices of their minerals, so that, together with the effects of higher corporation taxes, country’s GDPs should rise by more than 60%.  For Zimbabwe this means our GDP rising from the current $4 billion level to over $7billion. With these large gains, Government of Zimbabwe can build education and health welfare funds to benefit the extremely poor. When this happens Government builds the confidence in the political leadership.  As the economy grows it becomes possible to repay debts. That’s what comparative advantage means. The Africa Mining Vision is an avenue worthy exploring for African states to bring meaningful social and economic prosperity for African just like oil support Arab nations citizens.

A Government of my own heart is also one that acknowledges the important role of economic justice advocacy centres such as the Zimbabwe Coalition for Debt and Advocacy (ZIMCODD), in the evolution of national development policy. ZIMCODD is leading advocacy for economic justice on topical concerns including tax evasion, illicit financial outflows, corruption, accountability and transparency and also climate change. The work of economic justice advocacy organizations facilitates communication between policy makers and citizens in crucial areas of financial and economic policy, and direct support to these advocacy organisations helps build trust, which is an immense investment of goodwill that allows policymakers and citizens to function in a peaceful environment.  It also reduces the risk of adverse external influences by other Governments in national issues.

The environmental catastrophe started by large multinational conglomerates in Africa is catastrophic; from mercury contamination, sulphur dioxide, carbon monoxide, oil spills to the overall land degradation. The copper industry in Zambia and granite mining in Zimbabwe left in their wake large man made holes, and losses of plant, animal and human life ensue from such.  In Zambia in 2011 more than 3000 people were affected by poisoning caused by sulphur dioxide emissions by a mining company, and it had to take violent street protests, riots, and tear-gassing by police before the issue of the mining company could be addressed by government. When the Chiadzwa diamonds fields were ‘discovered’ in Zimbabwe, thousands of citizens were relocated to some inferior place. They have been out of the picture completely.

Communities are hoodwinked when large mining companies come with, “the jobs creation” cliché as Government ministers proudly declare at ground breaking ceremonies. But immediately thereafter little is realised by the locals, the wages also come tumbling down. This is well in order, as far as market theorists, this including the International Monetary Fund and the World Bank will say. Not to mention the Chinese, because it also happened recently in Zimbabwe, where the Chinese are arriving in multitudes. The Government I want must implement protective mechanisms for workers, vulnerable communities, and the environment, when striking agreements with large conglomerates.

On a closing note, the Government I want must protect the welfare and dignity of residents through a system of local government councils and municipalities that deliver water, health, electricity, refuse collection, infrastructural and environmental services according to best practice, as well as national and global standards.

You cannot copy content of this page