Assert resource ownership, President urges African countries
Lincoln Towindo in MAUN, Botswana
AFRICAN countries should assert ownership of their natural resource endowments and always take a firm stance when negotiating with foreigners seeking to invest in their nations to ensure they derive maximum benefits, President Mnangagwa has said.
Speaking during a Press briefing held after the Fourth Session of the Zimbabwe-Botswana Bi-National Commission (BNC) Summit here yesterday, the President said Zimbabwe has implemented a policy banning the exportation of unbeneficiated minerals, which aims to boost domestic processing and derive greater value from its natural resources.
Consequently, the exportation of unbeneficiated base mineral ore without written permission from the Government has been banned.
President Mnangagwa said African countries should not shirk from advancing tough policies that promote local value addition of their mineral resources.
“In Zimbabwe, we have banned the exportation of raw minerals,” he said.
“We have developed a roadmap where we must beneficiate all our minerals in Zimbabwe to an extent where we get maximum value from all our minerals, which is critically important.
“Where we don’t have the technology to do so, we devise a method of acquisition of the technology to beneficiate our minerals so that we get maximum value. We believe that many African countries, Zimbabwe included, had been exporting raw minerals that were beneficiated by those who buy from us and get much more value than what they would have paid to us.
“We have since said ‘no’ if we have no technology to beneficiate the minerals which we have, they (the minerals) are safe where they are until we have the technology, which is more beneficial to us.”
Some African countries have historically been hesitant to assert full ownership of their resources, fearing to discourage investment.
However, observers say, this approach has often led to unequal partnerships, with foreign companies reaping significant profits while local communities see minimal gains.
Addressing the same briefing, Botswana leader President Mokgweetsi Masisi said his country was recently locked in protracted negotiations with the world’s largest diamond company, De Beers, over a new mining deal.
De Beers, President Masisi said, initially tabled a miserly offer that would have witnessed the neighbouring country drawing a pittance from its vast diamond wealth. He said he stridently rebuffed the offer.
“About the protracted negotiations with De Beers; you are saying in the past there were deleterious consequences to the economies of leaders who are firm on multinationals and you asked how I felt (during negotiations) and was it a David and Goliath affair and how can this be taken to the rest of Africa,” President Masisi said.
“First let me say this, I never had a moment’s thought that it was a David and Goliath affair.
“If at all there may have been a suggestion that it may have been a David and Goliath affair… I felt that I was on the upper hand and I took the attitude that I was on top.
“I was on top for the simple reason, and this is my advice to anybody who leads a country with people and resources, if the resource is yours, you must adopt the attitude that you are on top and that is the basis.
“So I didn’t care what money they had or what technology they had; the resource is in the ground and it is ours; you are the visitor.
“Every visitor should know …in the extraction of mineral wealth you get permission and that permission has a fee.”
President Masisi said all potential investors in the extractive industry must first seek permission from local authorities to explore the resource in a specific area.
“That requires commissioning by the permission giver who is the one on top. Even if you are poor, it feels good. I felt good. I felt empowered by the knowledge I had gathered over time. I looked through all the agreements.”
The Botswana President said he had to assemble a team of “right-minded citizens” to lead the negotiations.
“Because of what had happened in the past, many of our powerful institutions or organisations had planted in our minds the belief that they had the upper hand because they had the capital, the technology, knowledge, route to market, and capacity to value add and we had nothing. They had also oriented the market to ensure that it was external to this geographic location and that all the regulatory mechanisms were controlled offshore.
“And so they developed, in the case of De Beers (they tabled) a nasty agreement, a terrible agreement. I don’t wish it on the worst of my enemies, although I have no enemies. Because it made us settle on a legally binding acceptance of operating only at a primary level. Almost Stone Age.”
He said eventually Botswana successfully negotiated for a better arrangement that will witness the country receive a larger share of diamonds produced through the Debswana joint venture, between the Government and De Beers.