For a very long time, Africa’s minerals have been mined, not by Africans but by others. We are told of how much the mining industry has contributed and is contributing to the growth of our economies through revenue mobilization (taxes, royalties), employment and export earnings. For instance in 2016, the Ghana Chamber of Mines has reported that the mining industry contributed 1.65 billion dollars to government revenue. Again, as at the end of 2016, the industry employed about 11,628 people. According to the African Center for Economic Transformation which studied local content and value addition in eight African countries, local content policies and legislation to promote direct employment of locals have become the norm. What we are not told is that these are just peanuts when compared to the total value of the mining produce in terms of profits, and that the rest is shipped out, not to mention the $80 billion lost in illicit financial flows.
Last week, there was a workshop in Accra to launch Ghana’s National Suppliers Development Programme and discuss how to develop mining value chains in the country. The event, which was co-organized by the African Minerals Development Centre, the African Center for Economic Transformation (ACET) and the German Federal Institute for Geosciences and Natural Resources, featured rich discussions about institutional development, capacity building and challenges in mining supply chains. During one of the panel discussions, one of the panelists questioned why we must always be at the periphery struggling for the crumbs. For me that is the major question that must occupy our minds at this point of our development.
How is it that mining has been taking place in Africa for centuries, yet we do not have many indigenous mining companies? Why do we not have companies manufacturing equipment to supply to the mining industry? Why do we not have companies with the capacity to refine the minerals that are being mined, such that they are shipped out in raw form to be processed in other places? As Dr. Ed Brown, ACET’s Director of Policy Advisory Services, has noted, “To build resilience to external shocks, the country has to transform its economic structure by shifting from the ‘revenue first’ approach to the mining sector to deepening local content and value addition”. There is need to develop local capacity to add value to our minerals and that is why last week’s event was important.
Going forward, however, the discussion on “local content” must include how to develop indigenous mining companies to compete internationally. This will ensure that the total value of our resources remain on the continent for the development of our countries. African governments should make it a priority to engender technology transfer, human resource development and facilitation of local businesses to venture into mining. For “local content” to be fully meaningful, it must include mining by African conglomerates.
Hardi Yakubu is a Communications Officer at the African Center for Economic Transformation (ACET). The views expressed in this blog do not necessarily represent the views of ACET.