Mining is the backbone of the country’s economy, accounting for more than 60% of export earnings. However, there is a school of thought to the effect that the Mines and Mining Development ministry is not doing enough to turn the abundance of mineral resources into revenue. Masvingo businessman and miner Taguma Benjamin Mazarire (TBM) discussed different issues pertaining to mining with NewsDay (ND) reporter Thomas Chidamba.
ND: What do you think should be done for the Mines and Mining Development ministry to operate efficiently?
TBM: The ministry should consider embracing a computerised mining cadastre system to improve the ministry’s efficiency and reliability such as processing of applications for mining claims, monitoring progress on each mining claim and repossess idle mining concessions to trigger mining productivity.
Besides, it eliminates the problem of double allocation of claims, thereby reducing conflicts among miners while giving miners more time to dedicate towards production.
The government, through the Mines and Mining Development ministry should re-capitalise the mining Industry Loan Fund (MILF) to provide affordable loans to miners towards acquisition of equipment, establishment of water supplies and to enhance mining operations. The government should consider allocations towards enhancing sustainable cities and communities to increase the impact and contribution of mining activities in the country.
ND: What measures should be taken to assist mining operations?
TBM: Mining concessions should be allocated to registered entities with the capacity to immediately work on them. Those mining entities should be able to create employment and sell ores through regulated channels to enhance the country’s forex earnings.
A number of gold rich fields are held for speculative purposes, depriving those with capacity to mobilise their productivity to mine on those fields. Failing to exploit mineral rich concessions is one of the impediments to achieving national goals.
Through a computerised mining system, the Mines ministry should effectively come up with a performance benchmark to assess the impact of miners on the community in order to attain sustainable development.
This kind of sustainable development should be in the form of industry and infrastructure innovation, community development, as well as strong institutions, and so on.
The assessment will encourage miners to retain a share of mining proceeds to build strong institutions through buying mining equipment. Those who are investing in the future of the mining industry should receive first priority in the allocation of mining claims, so that they reimburse the capital expenditure incurred and spearhead mining productivity.
Through increased productivity, the government will definitely achieve the US$12 billion industry by 2023 as part of the contribution towards the achievement of the middle income status by 2030.
Many miners operate with poor transport and market access, they suffer geographical marginalisation which makes them less able to access information on key technological inputs. It also leads to political maginalisation as communities that are far from the capital city are less able to influence policy-making processes.
Small-scale miners may be marginalised in terms of access to markets which forces them into informal, illegal or less lucrative channels. To that effect, lucrative incentives should be given to those in the informal channels to motivate miners to comply.
The ministry should also consider partnerships with responsible authorities and organise strategic workshops to inform and educate small-scale miners on the country’s mining regulations, safety issues, including tax regulations and changes.
ND: How important is mining to the country’s fiscus?
TBM: The mining sector is a critical foreign currency earner as it contributes about 60% of the country’s foreign currency earnings. Mining drives economic growth through its linkages with the rest of the economy, such as buying goods and services from suppliers, and supplying minerals to buyer firms.
Mining also contributes to sustainable development, particularly in its economic dimension. It brings fiscal revenues to the country, drives economic growth, creates jobs and contributes to infrastructure development.
Mining is relevant to all sustainable development goals (SDGs) and has particularly strong impacts on environmental sustainable goals like clean water and sanitation, affordable and clean energy.
It is relevant for social inclusion goals like poverty reduction, gender equality, peace, justice and strong institutions. It is also important for sustainable economic development goals like decent work and economic growth, sustainable cities and communities, industry innovation and infrastructure development.
In order to achieve this, revenue from mining and benefits from these revenues should flow in automatically. To translate fiscal revenues from the extractive industry into sustainable development benefits, government needs to design and institute fiscal regimes that ensure a fair share of benefits to the country, which are also attractive for investors.
Government should also prudently manage fiscal revenues from mining in a way that addresses the volatility of these revenues. It also needs to invest these revenues in long-term development schemes, infrastructure investments, and financial savings and economic diversification.
ND: Apart from mining, what measures should be taken to revive the economy?
TBM: Measures to restore the bread-basket status are key to reviving the local economy. Agriculture should receive priority to alleviate poverty so that the nation’s revenue will be focused on developmental goals rather than on consumption.
Government should keep on allocating inputs to small-scale farmers under programmes like Pfumvudza before the start of the season so that every family produces sufficient yields to feed itself because of its highly productive land and vast agriculture potential. Zimbabwe used to be not only self-sufficient, but also produced surplus crops for export.
The country should also attract foreign investment in agriculture to restore export status to boost foreign reserves targeted at infrastructural development, especially developing cities and communities.
Government should endeavour to revive and strengthen the industrial sector because it is the key sector responsible for the growth and development of any economy. However, it is only with a strong agricultural base that viable agro-allied industries could be set up or established and then poverty will effectively be tackled.
ND: What are your parting thoughts?
TBM: The government should invest mining resource revenues in a way that increases or does not deplete the national wealth. It should invest in infrastructure, social service provision and alternative sources of growth, thereby setting priorities that are consistent with the country’s level of development and needs.
The priorities of countries differ depending on their levels of development.
In less developed countries with significant needs like Zimbabwe, it is justifiable to use more finance in infrastructure, health and education, rather than saving the surplus in financial assets.