Resource information
In Africa, mining activities are undertaken by private foreign entities, which pay taxes to the state. However, mining activities are not contributing as much as they should to national economies. Despite the increase in productivity and profits, the real benefits of mining have yet to be felt by the majority of the people, especially mining communities. Many factors – including the negotiation of dubious mining contracts by politicians with no real experience in the sector, keeping contracts secrets , lack of transparency by both mining companies and governments, tax evasion, transfer pricing and corruption – have contributed to reducing the amount of revenue that goes to governments and is therefore available to support critical socio-economic development programmes.
As this report argues, unsurprisingly, many people are asking how there can be two such conflicting realities. And in particular they are asking about the exploitation and export of the region’s mineral resources. They want to know what governments are doing with the revenues that they collect from the commercialisation of these minerals – and why natural riches do not seem to translate into a reduction in poverty. And another question that comes up time and again is – how have other nations managed to use their minerals to successfully build their societies and diversify their economies?
The author argues that it is clear that drastic changes are necessary – and that there is now a chance that real change can now happen. The African Mining Vision has finally produced a charter that all African countries can use to improve the governance of their natural resources – to start to transform the mining sector so that it benefits everyone not just foreign mining companies and local elites. But to achieve change, countries need to strengthen those institutions that are essential to controlling, directing and overseeing the mining sector. In particular, parliaments need to be given the skills and knowledge to perform their role better. It is not a ‘silver bullet’ since other work also needs to be done – to build capacity of civil society and local community groups, to root out corruption, to make companies adhere to international best practices – but boosting the ability of parliaments to oversee the mining sector would go a long way towards improving governance of this critical sector.
