With that in mind, recently, several interesting episodes have been playing out in southern Africa, namely Zambia, Zimbabwe, and South Africa, which might be educational cautionary tales for Liberia and other economies which have just inked concession agreements and are commencing resource exports:
In Zimbabwe, the administration of Robert Mugabe is trying to both attract $6,000,000,000 in foreign investment in the sector over the next 5 years, while at the same time forcing foreign entities to surrender a majority stake in their operations to locals by the end of September. The contradictory nature of this agenda seems not apparent to the administration. Also, the roster of Zimbabwean businesses and investors in a position to acquire such shares may be a short list, and the scarcity of such buyers would effect the prices of these equity stakes in such a fire sale. (Thanks to Todd Moss of CDG for the link).
Speaking of the Mugabe administration acquiring mining assets and less than transparent circumstances, Zimbabwe was also approved to export diamonds under the Kimberely Process. These would be coming from operations that the military violently seized by force in 2008. The individual who seems to have had decision making power in this is Mathieu Yamba Lapfa Lambang, of the DR Congo, who is currently the Kimberely Chairman.
This dovetails well with other regional news on state-ownership of mines: In South Africa, there has been on-going talk of nationalizing mining companies, which some say would be merely a bailout and windfall for a clique of powerful, corrupt elites in and around the ruling ANC. So much so that prominent South African communists are against nationalization, which is the making of an Onion headline. Interesting how the South African saga is one chapter ahead of Zimbabwe's local-ownership decrees.
By the way, if you're unaware of South Africa's Aurora Mining saga, may I suggest the BBC African Perspectives Podcast as an introduction to the topic.
Elsewhere in southern Africa, there has also been an enormous deal of backlash in Zambia against extraction-extract entities, as this accounts for around 3/4 of Zambia's export earnings, but only about 10% of tax revenue.
Khadija Sharife wrote this eye-opening, jaw-dropping opinion piece on Al Jazeera last week concerning Zambia's predicament (thanks to zungzungu for the link). Its not the first time that someone's argued that the supposedly squeeky-clean, least-corrupt nations, such as lily-white Switzerland, are in fact the very center of global corruption.
What I hadn't heard before is Sharife's in-depth analysis supporting his position that the Extraction Industry Transparency Initiative-- of which Liberia was one of the first signatory countries-- disadvantages the less-developed partner government, and allows the foreign corporate investor nearly-limitless options for not only avoiding taxes both in the host country and elsewhere, but also to employ a range of amoral tricks of accounting for all types of bribery and corruption.
Each of these country's handling of its mining sector, its valuable assets and previous foreign investment, is critical not only to its own economic destiny, but beyond its borders. Nearly every sub-Saharan economy relies primarily on mining and extraction. Liberia, still in the nascent stages of economic stability, is balancing the promises of future prosperity in large part on mining--and how it addresses similar issues and concerns that of broadening the benefits to more Liberians.
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