A second look at commodity-export-driven growth

 These are crucial times in the social and economic development of Africa, when dramatic economic growth figures have not translated into any significant improvement in living conditions for the vast majority of people.

Instead, driven primarily by surges in commodity export prices, this economic growth has been harvested mainly by the transnational corporations which dominate the extractive sector.   

And ordinary people continue to experience joblessness, material deprivation and poverty, with mining-related environmental disasters and problems for mining communities hardly abated. 

Above all, as exposed by how even this growth slumped at the onset of the 2008 global financial and economic crisis, this primary commodity- export-driven growth model is fragile and unsustainable.

These sentiments were expressed by representatives of African trade unions, community organisations, non-governmental and other civil society organisations, and networks working on environment, development, and economic justice issues at the 14th Annual Review and Strategy meeting of the African Initiative of Mining, Environment and Society (AIMES) held in Accra.

The meeting discussed the issues, challenges and opportunities arising from recent developments relating to the extractive sector activities in Africa in the evolving global context.

Participant at the meeting reaffirmed their commitment to the fundamental principles that extractive resources are finite and must be managed prudently for the fulfilment of material and social needs and aspirations of present and future generations of Africa’s peoples, rather than for corporate profit. 

They agreed that such management must recognise and reinforce the fundamental rights of all people, as well as limits of the planet.  It must be rooted in democratic, transparent and accountable governance.

“The sector must enable the people of African to take control of their development and place in global relations, rather than being bargaining chips in realising of interests of transnational corporations and their governments in the play of geo-politics.

“We reaffirm our stance that the African Mining Vision (AMV) and its related analytical and policy frameworks as well as implementation plans are important to reorganising the political economy of mining in African countries.” 

Key dimensions

The meeting, among other issues, gave some key dimensions of the AMV package as:

The emphasis on the need to place mining in the structural transformation of African economies and societies;

The primacy given to national democratic sovereignty and control over the exploitation of Africa’s resources, and determining the nature of their use;

The recognition of the rights of constituencies within all countries, and their participation in the formulation of mining and broader development policy; and  

The commitment to building national and continental institutions for effective realisation of these principles.

The AMV package does not constitute a finalised, sacrosanct blue- print, but rather a guiding framework for concrete action at national, regional and continental levels. 

The perspectives, recommendations and actions contained in the package constitute a welcome lever for mobilisation of citizens to ensure that the interests of ordinary people and the equitable development of national economies in Africa prevail in the inevitable contestations generated in the implementation of the AMV package.   

In this regard, some aspects of the AMV should be improved and strengthened.  The specific concerns and interests of key domestic socio-economic constituencies in the vision, policy and practical documents should be deepened, and greater attention paid to raising awareness of the vision among citizens as well as the domestic political mobilisation required to implement the vision.

In addition, there is a need for greater attention to global economic issues, factors and forces which can frustrate the realisation of the AMV package.  

Furthermore, governments at the national, regional and continental level need to show greater resolve and take the steps required for realisation of the AMV package in its total integrity -- and avoid the temptation to cherry-pick aspects thereof.

In particular, urgent and further steps are needed to formulate specific policy with regard to key areas such as:

Optimising revenue generation and utilisation;

Protection and advancement of the interests and rights of communities affected by mining; and workers as well as artisanal and small-scale mining operators;

The development of economic linkages between mining and other sectors of the national economy, as well as the role of mining in industrialisation and economic diversification.

With regard to communities affected by mining, such policies must be aimed at operationising such key principles as prior informed consent of mining communities in relation to the commencement of mining operations; prompt, adequate and fair compensation for loss of means of livelihood; protection from negative environmental impacts, and effective support for communities to participate in mining- related economic activities.

Policies on workers must support unionisation in the mines, improvements in working conditions -- especially health and safety, job security and adequate remuneration -- and also support a more effective participation of organised labour in the defining of mining sector policies.

Artisanal and small -scale mining (ASM) operations require policies that realise and optimise the fact that a substantial proportion of minerals and related revenue in Africa is generated from ASM; that ASM provides a substantial basis for mining-related domestic capital accumulation, and improvements in rural livelihoods.

ASM deserves the same support and attention that is currently given to large-scale mines, tailored to specific needs of the sector.

To promote linkages and diversification, policy must facilitate and support: the sourcing and supply of inputs and services from the national and regional economy by national and regional economic entities; the processing of mineral products as intermediate and final input, as well as participation in core-mining activities by nationals. 

Above all, policy should reflect the recognition that such activities cannot be left to the dictates of the market, but  on the contrary require active intervention of various types by the state to create favourable and differential opportunities for national economic entities, including state enterprises.

The laudable efforts by African governments to revise fiscal terms in laws and contracts with mining Transnational Companies to improve equity between state and investor must be reinforced by other measures.

These include stronger commitment to public accountability for contract renegotiations, involving among others full disclosure of all mining contracts.

Also, steps must be taken to improve states’ capacity to prevent illicit flows from the mining sector through legal and institutional reforms and cooperation with CSOs. 

All these steps are critical in facing up to the danger of capture and distortion of the vision by the same old corporate interests and global, national and local elites -- including international and bilateral financial/aid institutions who are the main beneficiaries of the currently operative extractive sector policies.

Governments must own the AMV package

In furtherance of the above, it is incumbent on African governments to own the AMV package, and take steps to operationise it as an organic policy package;

African governments must take responsibility for financing implementation of the AMV, including financing the Africa Mineral Development Centre (AMDC), rather than adopt the same donor aid-dependent mentality;