Lebogang Motlana at the launch of Mining Development Centre

17 Dec 2013

Lebogang Motlana , Director, UNDP Regional Service Centre for Africa


Salutations:

The Director General  of Geological Surveys, Government of the Federal Democratic Republic of Ethiopia,
Permanent Secretary, Ministry of Mnes, Government of the Republic of Mozambique,
Members of the Bureau of the Conference of Ministers of Mineral Resources and Development,
The AUC Director of the Department of Trade ad Industry,
The Representative of the African Development Bank (AfDB) President,
Members of the Diplomatic Corps,
Heads of UN Agencies and other multilateral agencies,
Members of civil society,
Members of the Press and Other Media,
Distinguished Guests,

Chairperson, Allow me to express my sincere appreciation for giving me the opportunity to address this Senior Officials Meeting of the 3rd Ministerial Conference of African Ministers of Mining whose theme is “ Leveraging the African Mining Vision for Africa’s Renaissance: Towards Broader Ownership”. This theme resonates with the UNDP’s recently approved strategic plan for the period 2014 to 2017 which notes and I quote “It is now possible to eradicate extreme poverty, halt and reverse growing inequalities and achieve universal access to basic services, bringing everyone above a minimum threshold of well-being.  With more countries moving towards democratic political systems and responding to growing public demand, the room for voice and participation can expand now to an extent unthinkable before.  At the same time, new knowledge and experiences are making it possible to pursue economic growth, environmental sustainability and social equity. Unquote.

The sheer wealth of Africa’s natural resources has prompted a global discourse about opportunities and risks associated with such wealth. Those who previously characterized Africa as a “hopeless continent or a scar on the conscience of humanity” have changed their tune to one of “Africa is Rising”! It is easy to get carried away with this euphoric perspective of a rising Africa informed by economic growth rates averaging 10% over the last decade and I dare add during a time of severe economic depression globally. Africa is growing economically, but is confronted by real challenges that require immediate and real solutions.

 “One-third of the world's new oil discoveries since the year 2000 have taken place in Africa. Of the 8 billion barrels of new oil reserves discovered in 2001, 7 billion were found in Africa. There are new oil finds in Ghana, Uganda, Sierra Leone, Senegal, Niger, Sao Tome and Principe, Guinea Bissau, Kenya, Mauritania and Ivory Coast. Moreover, across the continent, vast land, mineral deposits and forestry resources are key traits. The developments are taking place at a period where, increasingly, traditional sources of development financing such as foreign aid have dwindled mainly due to the global financial turmoil. The natural resource boom therefore represents a critical potential source of much-needed wealth for poverty reduction and economic development. But it is not only oil that is being discovered in Africa, it is also diamonds, rare minerals, natural gas, coal, platinum, gold, to name but a few. These developments have rekindled a sense of optimism in individual countries and across the continent. Yet the observed tragic social and economic outcomes associated with natural resource extraction are well documented on the continent. Across the continent, the terrible realities of the so-called “resource curse” are more evident and there are few countries without bitter stories about the socio-economic and political trials and tribulations that natural resource wealth has brought to them.

The story has not been all bleak though. There is wave of realization on the continent that increased participation by local populations in natural resource governance, largely in the hands of foreign investors, is critical to shaping and harnessing the associated potentials for inclusive broad based development. Despite this realization, the participation of Africans, particularly women, minority groups and the youth in extractive sector’s governance has been hampered by several factors. Pressures of globalization, increased consumption demands, resource social tensions, exclusions, and wars, inadequate capacity and political will, and stark diversities among actors and stakeholders in natural resource management have limited the space for participation. Resource deals, particularly land, minerals, gas and oil remained are shrouded in secrecy (Cotula., et al, 2009).

There are also abiding concerns about excessive exploitation, and pollution. The link between these factors and declining water quality and public health are major concerns. These concerns are growing as is the appetite, race and scramble for the continent’s natural resources particularly oil and land. Diminishing supplies of land, fresh water, forestry, grains, energy and minerals elsewhere on the globe means that Africa will continue to command huge attraction (and of course cash) from the global race for her natural resources. The implications of this for livelihoods, social cohesion, employment creation, political stability and local empowerment are varied (positive and negative) and in some instances dire. In particular, the economic possibilities presented by the MDGs to reduce the scale and burden of poverty are at risk because of inappropriate policies and practices in the exploitation of Africa’s natural resources.

The sector provides huge opportunities for sustainable development and poverty reduction if properly managed with the right mix of policies and enforcement systems in place. Tax revenues, employment, export revenues, royalties, technological transfer, infrastructural development, and public goods and industrialization are potential products of the sector. These however, can be skewed if not managed and can exacerbate existing inequalities based on gender and age or vulnerability minority groups. While challenges and externalities including pollution, species extinction, and climate change may continue to be key concerns, improving governance, appropriate fiscal responsibility, appropriate legislation, institutions and participation can help catalyze the potential of the extractive sector as a creator of wealth and inclusive development.    Let me address three issues of pertinence to transformation of the extractive sector, namely: Policy; Youth and Women’s participation; and normative frameworks and enforcement.

Fiscal policies should facilitate identification of entry points that would deliver broad participation, particularly of the youth, women and minority group in the governance of the extractive sector. From this perspective, public investment is a key. While there are often concerns about crowding out of the private sector and fiscal deficits, adequate and well targeted public investments can deliver more sustained institutional development, open and accountable public financial management systems that can ensure policies work for poverty reduction and broad base participation in policies processes.

Promoting backward and forward linkages between the extractive sector and other sectors of local economies can be a catalyst to maximize natural resource wealth. These may involve adoption of fiscal policies and legislation that facilitate foreign investment whilst ensuring that revenues are adequately reinvested in domestic economies to enhance income and employment opportunities for the local people.  Local content provisions should promote and selectively target value addition, use of local materials and experts, capacity building of locals in the extractive sector particularly mineral, oil and gas sectors. Thus, macroeconomic policy should contextualize and mainstream the lessons and best practice in natural resource governance elsewhere and across the continent. Key policy questions that are relevant to addressing these challenges relate to among other things :
•     macroeconomic policy that contextualizes and mainstreams the lessons and best practice in natural resource governance elsewhere and across the continent.
•     A Viable, integrated and diversified extractive sector that exploits opportunities of the entire value chain; maximizing and sustaining natural resource wealth in a context that mainstreams environmental, social and and economic considerations
o    Policy options and key considerations that should inform decisions relating to proportion of revenues saved, invested, and when and in which areas to ensure natural resource wealth are maximized
o    Ensuring that issues of equity, sustainability,  differential public and gender interests, concerns and needs are mainstreamed into policies on distribution and allocation of the wealth accrued from natural resources.
o    Sustainable partnerships between multinational companies and local communities and government that foster stakeholder participation and integrated life cycle planning in all related activities
o    Possible trade-off often associated with the extractive sector such as associated damage to the environment and potential benefits to local economies including  related issues such the nexus between the extractive sector and the spread of pandemics such as HIV/AIDS

Let me end by stating and reaffirming that UNDP stands ready to continue our support and patnership with the AUC Department of Trade, the UN Economic Commisssion of Africa, the African Development Bank  aimed at the realization of the goals of the African Mining Vision. UNDP aims to bring its extensive Global, regional and country level experience and knowledge which spans a range of thematic areas including governance, conflict prevention, environment protection, environment protection and adaptation to climate change and private sector development in support of the African Mining Vision and in support of the establishment of the African Mineral Development Center.  In the extractive industries, strategic and commercial interests among partners and industry need to converge with national development objectives and plans. Further, dialogue at national level and local levels often takes place in contested spaces and requires credible arbiters to ensure meaningful stakeholder participation. This is a role that calls for the neutrality and impartiality of the United Nations.
UNDP will aim at bringing it broad development mandate, comprehensive range of services to facilitate the process whereby the extractive industry policies are elevated and integrated into national development dialogue and goals that are not single issue concerns and to convene a cross sector of stakeholder to the policy and strategic discourse. In addition, intend to galvanize coordinated action within countries, between countries and foster south-south collaboration and mutually beneficial knowledge exchanges. 

UNDP's intervention will focus on strengthening governance, accountability and transparency in extractive industries; specifically we will support the AMDC to foster the following principles:
1.  Participatory planning, policy formulation and effective legislation
2. People centered exploration and extraction
3. Effective revenue sharing, and
4. Investing in Human Development and structural transformation
Let me end by again paraphrasing from the UNDP Strategic 2014 to 2017 whose guiding principles are:
(a)    Being guided by national ownership and capacity with countries making decisions on how best to meet their people’s aspirations and with UNDP helping to develop the policies, leadership skills, partnering abilities and institutional capabilities that can sustain results over time;

(b)    Recognizing the intrinsic value of the body of economic, political, social, civil and cultural rights established by the United Nations that are pursued through the human rights-based and other approaches, as well as other commitments made through multilateral agreements;

(c)    Utilizing sustainable human development to guide our contributions, understanding the concept to mean the process of enlarging people’s choices by expanding their capabilities and opportunities in ways that are sustainable from the economic, social and environmental standpoints, benefiting the present without compromising the future ;

(d)    Reflecting the pivotal significance of gender equality and women’s empowerment, understanding that sustainable human development will not be fully achieved unless women and girls are able to contribute on an equal basis with men and boys to their societies;  

(e)    Ensuring participation and voice in pursuit of equitable access to development opportunities and gains across the population, working with the poor and other excluded groups, whether women, youth, indigenous peoples or the disabled, as agents of their own development

I thank you for your attention