The piece “MWEITI and the Africa Mining Vision” featured below was initially published in Malawi’s Mining & Trade Review Issue Number 37 that is circulating this May 2016.
The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.
MWEITI and the Africa Mining Vision
In February 2009, Malawi’s Head of State, the late Bingu wa Mutharika, endorsed the African Union Africa Mining Vision (AMV). This watershed document outlines how the continent can best use its non-renewable natural resources for sustainable development. In its own words, the Africa Mining Vision seeks “transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development”. Proponents argue that the AMV, developed during the commodity price boom, is set apart from other governance initiatives in the extractive sector: it is Africa’s home-grown initiative that emphasises how resources can be harnessed for social and economic transformation with a shift away from Africa being solely an exporter of raw materials. I will look at the AMV briefly in this column and how the EITI can complement the domestication of the AMV in Malawi.
Seven years after the AMV was endorsed, most countries are yet to domesticate the vision. The African Union set up the African Minerals Development Centre in 2013 to provide technical support and spur on countries to domesticate the AMV in the form of a ‘Country Mining Vision’. Over the last year, the AMDC has reached out to the Government of Malawi and is expected to support Malawi in developing its own Country Mining Vision as well as in building the capacity for negotiation of contracts in the extractive industries. This is in line with President Arthur Peter Mutharika’s commitment, made when he took office in 2014, to establish a mining contract negotiation unit. Over the last couple of months, a number from Malawian civil society and one traditional leader have also participated in continental discussions on developing a multi-stakeholder monitoring framework for measuring the realisation of countries’ progress towards the AMV.
The AMV includes a number of pillars and approaches that countries should take to ensure mining is a means to development and not an end in itself. Like the EITI, it focusses on fiscal regime and revenue management yet with emphasis on how revenues are used. It also highlights the following areas as important for realising the developmental benefits of minerals: geological and mineral information systems; artisanal and small-scale mining; the legal and institutional environment; linkages, investment and diversification; community, environmental and social issues; and institutional capacity. Countries are expected to develop their own Country Mining Vision that addresses all these areas and then to monitor progress towards realising the vision.
The EITI provides a useful tool to ensure that revenue is managed well by reconciling payments made by companies to government with government receipts. The initiative is implemented by a multi-stakeholder group and should increase transparency and access to information on the extractives sector that is not always readily available. In Malawi, the initial Scoping Study, which I wrote about last month, has already begun to reveal areas of needed improvement in the way revenue is being managed and recorded by the respective Government institutions. When the first complete report is out in one year, it should make useful recommendations to Government on how to improve revenue management and enforcement; it does not yet go so far as tracking how revenue is utilised.
Managing revenues is only part of the conundrum, where pervasive poverty exists despite mineral wealth, which the AMV seeks to address. According to the AMV online portal “it’s not just a question of improving mining regimes by making sure that tax revenues from mining are optimized and that the income is well spent – although that is clearly important. Rather it’s a question of integrating mining much better into development policies at local, national and regional levels”.
Whether or not this AMV can be realised is very much up to individual governments and evidently must go beyond creating more visionary documents that gather dust. However, the EITI, which is already being implemented, can be used as a resource for providing recommendations and information on revenue management which is at least part of why Heads of State endorsed the Vision in the first place.
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