WINDHOEK – Much of Namibia’s mineral wealth is now in foreign hands because Namibians have been selling Exclusive Prospecting Licences (EPLs) very cheaply to foreigners. During the Growth at Home conference in the capital last week, Prime Minister, Dr Hage Geingob said that while government tries to foster economic empowerment, the practice of selling EPL’s cheaply is perhaps due to the ignorance of those that are allocated the EPLs.
“However, we cannot really fault them. These are people who have been staying in segregated ghettos and villages with no electricity, or material possessions. Some have never driven a good car. To them, a paper called an EPL for which a foreigner is prepared to pay N$2 million is meaningless. But for N$ 2 million most will jump at such an opportunity. Therefore, let’s educate them,” remarked Geingob.
The PM added that due to being economically deprived for centuries, Namibians do not have an investment culture. He said it is perhaps because Namibians have been “hungry for a long time” that many sell the EPLs as they are seeking immediate gratification. “Let’s stop this practice of giving our EPLs to foreigners for peanuts. We should realize that an EPL sold for N$2 million today could be worth N$2 billion tomorrow,” advised Geingob.
He however added that Namibia is a democratic country and people can sell their EPLs, if they so wish. “Therefore we can only educate them so that they can wisely bargain and get the best sustainable deal out of it,” noted Geingob.
The PM went on to say that Namibia’s abundant mineral wealth should belong to all Namibians, but currently Namibians are not the owners. Said Geingob: “Not because we do not have the political power to control these resources but due to how as citizens we understand and have been handling government empowerment initiatives. Also, mineral ownership remains out of the hands of our people due to lack of information.”
Even though mineral beneficiation contributes 14 percent of the manufacturing output, Geingob feels the sector can play a much larger and more pivotal role in the industrialization process. Instead, he said, the sector continues to export seemingly ad infinitum resources such as dimension stones, manganese, fluorspar uranium, gold, zinc, lead, copper, diamonds and others in either the most basic forms of processing or none at all.
The PM compared the mining industry with the fishing industry as the latter has in recent years undergone extensive Namibianization and value addition. “Prior to independence, all our fish used to be owned by foreigners and exported unprocessed to Spain and the rest of Europe. At least today following government interventions in this sector a lot of onshore fish processing is taking place, and Namibians have become co-owners of the fishing resources. It is a good start on which we should continue to build in the other sectors too. However, the picture is different when it comes to our mineral resources,” said Geingob.
According to the National Statistics Agency, Namibia suffered a trade deficit of N$14 billion in 2012. In the same year mineral exports accounted for 44 percent of Namibia’s total exports. Geingob noted that what is most worrisome is Namibia’s heavy trade deficit with South Africa. While Namibian exports totalled N$7 billion to South Africa in 2012 it imported more than N$41 billion worth of goods from our southern neighbour, resulting in a trade deficit of over N$34 billion.
“For Namibia to register positive trade balances with other countries, exports of raw materials such as diamonds, copper, zinc, gold, semi-precious stones and others must come to an end. It is a matter of sensible development economics for us to increase value addition in the mining sector, and thereby stop exporting the jobs and the capital which are directly needed for an employment generating economy,” warned Geingob.
For the purpose of increasing Namibian ownership of mineral resources, government established Epangelo as the appropriate vehicle to obtain EPLs and enter into joint venture partnerships with foreign companies. In most cases international foreign companies have the financial resources to undertake expensive mineral exploration, for which they are insured against any risk.
“By partnering with them through Epangelo, we can develop our country with our own resources like others are doing and in line with Vision 2030. In today’s ever-changing economic and political global environment, the importance of an effective domestic law to safeguard our ownership and management of strategic natural resources cannot be overstated,” concluded Geingob.
By Edgar Brandt