Friday, September 21, 2007

Mining has not benefitted Africa

Africa Initiative on Mining, Environment and Society (AIMES) have observed that although foreign direct investment (FDI) in Africa's extractive sector has significantly increased over the last few decades especially with the new entrants such as China, India, as well as the US involvement in the oil extraction in Gulf of Guinea, this have not led to improvement in poverty reduction, environment protection, and respect for human rights in Africa.
AIMES in a meeting in Freetown said they have rather increased deprivation of the people and governments of Africa to the benefits of mining.
Key among these negative consequences are increased incidence of poverty, scarcity of environmental and livelihood resources, conflicts, gender disempowerment, violence and insecurity.
The meeting which was held in July acknowledged that bad governance, inadequate policy framework, corporate lobby, pressure from IMF/WB and corruption are some of the reasons for the increased cost and reduced benefits from the mining sector.
The communiqué which was signed by members said mineral policies and laws have legalized mineral resource capture and capital flight by making provisions for high off-shore retention of profits, low royalty tax; inadequate compensation; minimum state equity participation, numerous holidays for corporate and income tax; and duty free importation of mining equipments.
“Bad governance also expresses itself in the lack of predictable and participatory decision making processes in the mining sector at all levels”. It also expresses itself in inadequate level of transparency and accountability in the mining sector and access to information to make informed decisions”. In addition, the communiqué stated that governance institutions are weak and poorly-equipped to regulate the mining sector, which has resulted in inadequate regulation of the sector.
The meeting also observed that community marginalization in mining issues has exacerbated the abuse of communities and deprived them of the benefits of mining. Increased mining activity has led to a corresponding decline in the quality of life for people living in mining areas.
Most mining communities lack the capacity to deal with the mining issues that affect their livelihoods and hence are paralyzed to take any actions to advocate and demand for their rights.
These problems are reinforced by the attitude, behavior and practices of transnational mining corporations that are implementing new tactics to increase their profits through corporate lobbying in order to influence national policy choices for the extractive sector.
The policy prescriptions for the extractive sector are pitching mineral endowed African countries in a competition for a race-to-the-bottom. Indeed, neo-liberal regional and international frameworks, like Economic Partnership Agreements (EPAs) and the General Agreement on Trade in Services (GATS) will consolidate the neo-liberal framework which mining companies are operating under, and fragment African economies by demanding services liberalization.
These agreements open the extractive sector for the benefit of transnational corporations at the expense of national economies, workers, local industries and local communities.
Again, participants observed with concern that pressure and policy prescriptions by the International Financial Institutions(IFIs) more especially International Monetary Fund (IMF) and the World Bank Group (WBG), European Investment Bank(EIB), African Development Bank(AfDB) and others, are inconsistent with the development needs and priorities of African countries and peoples.
The communiqué was endorsed by members of the Africa Initiative on Mining, Environment and Society (AIMES) from Burkina Faso, Congo DR, Ghana, Guinea, Mali, Nigeria, Sierra Leone, Tanzania, Zambia and Zimbabwe in collaboration with our partners from USA. Lindlyn Tamufor and Abdulai Darmani endorsed it for Ghana.

Ghana Business & Finance of Thursday, 20 September 2007 - Mining has not benefitted Africa - AIMES