Speaker of Parliament, Advocate Jacob Mudenda has called for policy reform in the mining sector saying the country was being short changed by investors due to over reliance on antiquated maps and corruption within the sector.
Speaking during a recent mining workshop in Mutare, Mudenda urged the government to model its mining legislation to the African Mining Vision (AMV).
He called for exploration investment, geological mapping to determine quantum and quality of deposits as recommended by the African benchmark, for government fully utilize mineral revenue to finance sustainable development.
“The Ministry continues to rely on old topographical maps in the issuance of mining claims. Those maps are really antiquated, some of these maps are barely visible hence the need for the Ministry of Finance to sponsor the completion of a mining cadastre system.
“This system would not cost more than US$20 million, we can make savings and ensure the ministry if operational as far as the cadastre. It is imperative that we know the minerals that we have especially along the Great Dyke this is important in signing of agreement without which the country could be prejudiced,” said Mudenda.
Mukasiri Sibanda, a regional advisor on tax and natural resources governance with the Tax Justice Network Africa (TJNA), says government must dispel negative policy perceptions by instituting comprehensive legal reforms -to enhance attractiveness and boost foreign direct investment.
Sibanda, said international recognition of vast mineral resources should stimulate government to implement reforms including adoption of a mining cadastre register and resolution of miner farmer conflicts among others.
“African countries that were deemed to be very attractive according to the 2019 annual survey are Zimbabwe and DRC,” he said.
Sibanda was making reference to Canadian think tank, Fraser Institute’s Mineral Potential Index of 2019, places Zimbabwe among top African countries with great geological potential, signified by vast mineral deposits. The Index combines with the Policy Perception Index to form an aggregate Investment Attractiveness Index.
Fraser Institute’s Investment Attractiveness Index asses the intersection of mineral deposits and public policy factors such as taxation and regulatory framework, in attracting or repel mining investment.
He added, “When it comes to investment, the perception of investors in terms of our exploration, they are attracted by our geological potential. It means we have more work to do in terms of correcting the negative perception, say, on our policy environment.
“This, to me should inform Government that more investors could be coming in because of our geological potential, that is if all things are equal and the domestic laws protect and respect investment,” said Sibanda.
Mordor Intelligence, a fully revenue-funded organization providing customized, actionable market insights also ranks Zimbabwe as one of top three African countries which offer the best Return on Investment (ROI).
It says Zimbabwe’s economic challenges present vast investment opportunities in several key areas, with an unrealized high growth potential in agriculture, construction, mining, oil and gas and manufacturing.
Mordor Intelligence in a survey to establish African country economic outlook for the medium term, ranked Zimbabwe highly, after only Nigeria and Kenya, for its human capital- educated and competitive labor, well developed infrastructure and easy access to regional and world markets.
Mordor Intelligence notes vast potential for prospecting and mining of various minerals like gold, coal, diamond, granite and platinum (Zimbabwe has largest reserves after South Africa in the world), cutting and polishing of diamonds, quarrying and mineral exploration.
“Almost all sectors of Zimbabwe’s economy are in need of immediate investment sectors like agro-processing and agro-forestry, manufacturing (textiles, clothing and footwear, chemicals and technology ), tourism, services (construction, infrastructure and transport), mining and ICT present a host of investment opportunities,” reads part of its market analysis.
Further, the United Nations Conference on Trade and Development (UNCTA) also calls for robust policies to finance sustainable development, in its 2020 Africa Report on Trade and Development, focused on tackling Illicit Financial Flows (FFs).
African nations are advised to strongly respond to Multi National Enterprises’ (MNE) aggressive tax planning tactics, transfer pricing and shifting profits from high-tax jurisdictions to low or no tax jurisdictions, eroding investment in the continent.
UNCTAD reports IFFs are primarily through three key channels, trade mispricing through manipulation of import and export prices, debt shifting to reduce profits and tax burden, as well as location of intangibles and intellectual property.
Annually there is ‘flight of US$88.6 billion from Africa’ which could bridge half of its SDG financing gap. An ‘estimated 30-50% of global FDI is channeled through offshore shell companies’, states UNCTAD.
“Loopholes in many tax treaties in Africa leave countries vulnerable to tax avoidance, without minimum standards for investment treaties in African countries risk a race to the bottom to attract FDI,” states UNCTAD.
