IS IT CLIENTALISM OR BLIND AMBITION?
Questions remain: Why don’t Namibians own their own resources? How should Namibians benefit fully from its mineral resources? Why haven’t the masses benefited? How can we better maximise benefits derived from Namibian resources, in this case, its raw natural resources in the mining industry?
Could Nationalisation and State Mining Company (Epangelo) already in existence be the way, because the mining sector in particular and the economy has not yet transformed?
Mining is the biggest contributor to Gross Domestic Product (GDP) alongside tourism and agriculture. Full scale mining in Namibia is foreign owned. Mining sector’s turnover in 2007 was N$13.8b, contributing N$5.5b to the GDP.
The mining sector, which includes uranium is expected to grow at annual rate of 6.9% over 2008-2012.The industry is estimated to reach the value of around US$1.44t by 2012, contributing over 17.8% to the nation’s GDP.
Namibia exports both resources and capital in the mining sector with little staying in Namibia.
Recently, Minister of Mines and Energy, Isack Katali declared through a Cabinet directive that some resources are strategic resources and that Government/State-owned companies in the future will own or have a stake in those resources sector and this was not met well by transnational corporations and western countries, because of their dominance in the Namibian mining industry.
Epangelo Mining; a state owned company, for me, should lead the way in the partnership between De Beers and Namibian government in NamDeb is a good example as to how Namibian people could get a stake in their own resources and transform this sector and benefit from their own resources.
Uranium mining is becoming one of the biggest businesses in the mining industry and could be used to benefit all Namibians. for instance, to provide electricity to the people of Namibia through its own electricity generation, especially nuclear energy that is a low carbon energy solution. The electrical and nuclear generation in accordance to the UN charter, China and India have high demand for uranium and they need to be told that Namibia has its own plans for what it intends to use its own, especially providing electricity through electrical power and nuclear energy and I ask that Minister, Katali make this very clear to all those with interest in the mining industry.
Mining industry has the potential to create real jobs and contribute to GDP, so that Namibians can benefit, not only on cheap benefits or peanuts but the ripple effect staying in Namibia. The recent announcement on strategic resources showed that private foreign companies are not interested in looking after their interests and only want profit by protesting against Namibians taking shares and interest in their own resources and we can assume they are not interested in developing Namibia but only want her resources. Thus, we must all guard against this kind of behaviour.
In my last article, I stated that the recent discovery of oil and gas of approximately 11b barrels, I would have preferred that only Epangelo mining gets the license and partner with an international company to transfer financial, technical, training and experience, so that Epangelo takes over these operations after a certain period of time.
Namibians haven’t been able to benefit from this industry directly as most mines are foreign-owned and Namibians don’t own the substantial amount of shares in this sector to eagerly do more with its own resources. The question is; who is to blame? The foreign-owned mines say that Namibians are hardly well qualified and trained to take over and that they don’t have the skills and training and experience to take charge of this industry.
The Ministry of Labour and Social Welfare, Employment Equity Commission and Office of Ombudsman is supposed to make sure that these companies transfer skills to Namibians. I recall reading a law that stated that all companies operating in Namibia are required to train Namibians and transfer skills to the Namibians but, because of the issue of accountability in Namibia, I doubt any follow-up has been made to see if that has been done. They say Namibians are unemployable but then again, it is being done purposefully not to transfer real skills to Namibians, so that they can run their own mining industry instead, they are given the jobs that don’t really allow them to learn the real skills they need to win this industry.
It is also obvious that Namibians don’t have capital to own mines. The SME bank has been long overdue and it’s being expected to open doors in 2012 and as much as we want it to solve such problems, I don’t think it would be necessary to provide solutions to Namibians who have qualifications in mining or geology. If Namibians could and would like to open mines, Government needs to engage Epangelo to aggressively take up shares in mines being opened in Namibia and use the example of NamDeb.
The other will be that we also don’t need those Namibians who get licenses and they run to their highest and sell it off. They are defying the very essence of trying to Namibianise these sectors. We thank the Government for empowering Namibians. Those Namibians that get license and sell them and don’t give back to the community, should clearly be punished and such licenses should be withdrawn from them. These compromised Namibians and traitors should be disregarded as they only have ‘making-money’ at heart and not Namibia at heart.
The absence of the research council functionality in Namibia to promote research and development in this sector, hampers the very notion of Innovation and new ideas. More needs to be done by researchers. I am grateful that Minister, Abraham Iyambo has asked that a new policy be written for the research council since it falls under his ministry. Hopefully, this will suggest eating more than just institutions but pushing for research and exploration and innovation to even encourage sustainable mining.
The absence of the industrialisation policy has also brought problems in Namibia. We only have a trade policy but no industrialisation. It is my sincere hope that one comes out soon, so that we have this policy to promote and make clear what Namibia’s position in terms of its industry, especially with regards to uranium as it is becoming more in demand, China and India continue to grow their economies from resources in Africa and Namibia is of keen interest to all and I am sure that an industrialisation policy would know what we aim to do with our mining industry and how it will benefit us as Namibians.
Namibians don’t own their mining industry and that needs to change. We know they face a lack of training and skills, fluctuations of commodity prices and Namibia/US dollar exchange rate. We know that they don’t have the capital means to take on such activities. I am, therefore, suggesting that Government help in legal and regulatory framework, plus financial and technical resources, so that Namibians own and take control of our own resources and reap the benefits that with such resources.
Epangelo mining should be allowed to engage in this industry further and take up stakes or shares or controlling stake, so that Government benefit more from dividends, royalties, levies from export, company tax and income from this companies in this industry. Such laws must be proposed and brought before parliament so the real value of Namibian resources start in Namibia.
The proposal handed in by Cabinet by the Ministry of Finance of mining taxes and new introduced taxed in its first form for my understanding was very right and is the way to go. We want companies to be taxed and since the mining industry is growing by over 6.9% between 2008-2012, Government can get a lot of income to achieve many of its programmes. I believe that with these taxes, it can contribute a lot, especially to generate more revenues and perhaps give more resources to the National Youth Council of Namibia, so that it can further aim to strive to fight for the needs of the youth as Mandela Kapere has said that, NYC wants to work but the money factor is affecting their ability to provide services to the youth and to address their issues.
The fact remains that we are still living with the legacy of apartheid. Nationalisation and State mining is not wrong, it’s not that State increased intervention doesn’t necessarily get scared of investors, after all, the private sector depends on Government activities to survive through tenders and service provision and they require massive Government bailout to prevent them from collapsing and save jobs. Japan and South Korea did it too and Namibia can learn and take what would work for them.
Remember that if this industry is not regulated and properly managed, it could lead to the Nigerian situation in Niger Delta but it could be avoided if we learn from Norway’s way of allowing resources such as gas and oil to be controlled by State-Owned Company and Norway doing quite well.
Let’s learn from former President Lua Lua of Brazil who brought approximately 25m people into the middle class and another 20m from poverty using Brazil’s resources to benefit the masses that the private sector rejected but now they are benefiting since their market expanded and they can sell their products to more people. Hugo Chavez of Venezuela is also a good example in terms of using state resources for the people of that country.
Government must put in place necessary legal and regulatory frame work plus financial and technical resources, so that we take control of these resources and that it’s important that not everything should be left to the market to decide. The markets have shown not to be stable and they are detrimental.
Lot Ndamanomhata writes in his own capacity as a student of Bachelor of Public Administration at the University of Namibia. PF