November 27, 2020 11:24 pm

MINERALS AFRICA DEVELOPMENT INSTITUTION (MADI) LIMITED

creating an open and constructive environment to support the economic, social and environmental structural transformation of Africa's mineral sector

MINERAL POLICIES, LEGAL AND REGULATORY FRAMEWORKS

The Africa Mining Vision (AMV) is a policy framework that was created by the African Union in 2009 to ensure that Africa utilizes its mineral resources strategically for broad-based, inclusive development.

The Africa Mining Vision (AMV) was formally endorsed in 2009 by the African Union (AU) Heads of State and Government to promote equitable, broad-based development through the prudent utilization of the continent’s natural wealth. The AMV looks broadly and deeply at how development can be achieved through the creation of local value, driven by the strategic use of mineral resources in Africa. It charts a path for generating and realizing various types of linkages arising from the mineral sector through industrial development and technical upgrading. The AMV recognizes the contribution of artisanal and small-scale mining (ASM) to local economic development, and promotes women’s rights and gender justice. It establishes a progressive fiscal regime that can curb the haemorrhaging of the continent’s resources through tax evasion and avoidance and illicit financial flows from the mineral sector. It upholds the principle of free, prior and informed consent (FPIC) for mining-affected communities, and addresses the social and environmental impact of mining. It is designed to be flexible and dynamic; implemented through derivative policy instruments – such as the Country Mining Vision, the African Mineral Governance Framework and the Compact with the Private Sector – while maintaining an integrated, strategic vision for national development.

However, eleven years after its adoption by AU Heads of State and Government, implementation has been slow and there is an extremely low level of awareness of the framework among key stakeholders in the mineral sector. Africa’s leaders, citizens and the private sector must act now to ensure that the goals of the AMV are realized. It is a transformative policy that can drive sustainable development on the continent.

CONTEXT

The starting point for any country to benefit from her natural resources is having coherent policies and prudent and transparent legal and regulatory frameworks that can result into a well governed minerals sector. For Africa, these policies, legal and regulatory frameworks need to be harmonized at sub-regional and continental levels.

Since the financial crisis of 2008 many countries have struggled to maintain manageable budget deficits as their economies contract. With revenue down from reduced economic activity and increasing expenditure on items such as social welfare, governments around the world are either tightening their belts or finding new sources of revenue. In a number of producer nations, concerns over ‘Dutch disease’ or two-speed economies have led to plans to tax resource extraction more heavily, and provide tax relief or subsidies to other sectors.
This has led to what is now termed as “Resource Nationalism” in some countries. Resource nationalism has become a common feature of state policy in many developing countries in recent years.
“Resource nationalism has become a contagion impacting the mining & metals industry across the globe. The industry needs to become more engaged in the analysis and management of this risk which can place a heavy burden on existing operations and influence future decisions on where to invest.” Andy Miller, Global Tax Leader — Mining & Metals, Ernst & Young.
In 2014, Paul Collier while speaking at the Investing in Africa Mining Indaba warned Captains of Industries that African leaders were smelling development and therefore Mining companies will not maximise profits for their shareholders while acting as philanthropists to African governments. So Corporate Social Responsibility CSR) cannot be enough and on this realization, recently OECD came up with Creating Shared Value (CSV) along the value chain.

Above and beyond, the cardinal question is: “What policies, legal and regulatory frameworks should be put in place in Africa for Africa to maximize benefits from her vast mineral wealth?”

Translate into Your Language»