‘Mineral leakages bleeding Zimbabwe economy’

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SOCIO-ECONOMIC watchdog, Zimbabwe Coalition on Debt and Development (Zimcodd) has called on government to curb mineral leakages and export of raw minerals to help revive the economy.

In its recent statement on mineral leakages, Zimcodd said approximately US$12 billion in potential foreign earnings was lost through export of raw minerals.

“Evidence suggests that Zimbabwe continues to bleed in mineral revenue while citizens are disenfranchised, exposed to violence and health risks, and are deprived of economic gains,” read the Zimcodd statement.

“In order to curb further bleeding, there is need to strengthen the country’s export earning capacity and promote socio-economic development.

“The government must implement the local content strategy for broad-based socio-economic growth at national and sub-national levels. The government should put forward policies that encourage or force businesses to add value and beneficiate minerals to increase export earnings as well as employment of local people.”

Zimcodd also proposed that duty on mineral processing equipment for miners and licence fees should be reduced in line with the international best practices.

“Government must amend the archaic Mines and Minerals Act in line with international best practice as provided for in the 2022 budget.

“The Act does not capture international standards and is not in alignment with the Constitution on transparency, accountability and stakeholder inclusion.”

Transparency International Zimbabwe executive director Tafadzwa Chikumbu told NewsDay that  a legal framework was required to guide the process.

“Countries which do well in terms of value addition and beneficiation have dedicated pieces of legislation that govern a particular industry.

“To that effect our Mines and Minerals Act currently being debated in Parliament should have provisions for beneficiation in which specific minerals should have defined parameters in terms of what the investor needs to export,” Chikumbu said.

“So everything starts with a legal framework that defines exactly the minerals which should be value added and the percentage of value addition because it may not necessarily be 100%.

“The policy should specify the different thresholds for beneficiation like 20%, 50% or 100% with different incentives being offered to companies that value add and beneficiate their products.”

Economist Prosper Chitambara said: “It also implies that we are exporting jobs and development to other countries. So beneficiation and value addition helps to lock in value in the country and thereby promoting industrialisation led-development.”

United Refineries Limited chief executive officer Busisa Moyo said: “Beneficiation and value addition is the thrust in most African countries since we are continually exporting raw materials for centuries without anything to show for it. Manufacturing and processing reduces price shocks that come with raw primary products exported, and beneficiation is in line with the Africa Free Continental Trade Area (AFCFTA).”

He added that there was need for minimum standards of legislation to tackle issues of property rights, negative perceptions and create a stable macroeconomic environment in the country.

Source – NewsDay