Mines minister Tom Alweendo made it clear that awarding of exploration rights to those with no necessary capabilities has potential to lead to unethical behaviour from not only the officials responsible for licensing but also those who are being licensed.
He made these remarks last week in the National Assembly. He was focusing on issues around the mining and petroleum sector, which are now seen as the window of opportunity to transform the economy.
“Depending on how we decide to deal with opportunities in the two sectors, we have the real potential to effectively address the triple social ills of unemployment, poverty and inequality. When exploration licences are awarded to whoever applies, then you are creating a situation where there are more applicants than opportunities,” said Alweendo.
He added there is too much criticisms on local ownership that need to be addressed to make sure that the two sectors continue to be economically beneficial to the Namibian people.
The minister noted what led to the situation where the mining and petroleum sectors are dominated by foreigners is the fact that the sectors require complex technologies and is capital intensive, which Namibians lack.
According to him, awarding exploration rights to someone with no capabilities is tantamount to denying citizens the potential economic benefits to be derived from natural resources.
“If we award exploration to someone who is not able to, no exploration will take place and without discovery, the minerals will remain in the ground and will have no economic value for the country,” added the minister.
He, however, proposed an idea on how to incentivise local ownership, which is to establish a State funded minerals exploration fund that could be funded by a portion of the royalties that mining companies pay to the State. The fund will then be used to assist eligible local entrepreneurs who wish to invest in the mining sector.
Furthermore, Alweendo stressed that oil discoveries are now proven to be of commercial quantity and government is expected to get benefit from revenue that will accrue through various taxes such as income tax and royalties. Meaning the local economy stands to benefit more from local content.
Local content is the value that the extraction of oil brings to the local economy beyond the resource revenue.
He added that it should be a requirement for the international oil companies to ensure that all services that can immediately be provided by local entrepreneurs are acquired from local entrepreneurs. In cases where local entrepreneurs are not able to provide certain services government will need to have a clear programme as to how to capacitate them.
Weighing in, in the National Assembly, Rally for Democracy and Progress (RDP) president Mike Kavekotora advised government to quantify the importance of shareholding in its natural resources and also said transparency should be at the forefront in the sector.
Bernadus Swartbooi, Landless People’s Movement (LPM) president asked for better and best practices in which minerals are used to transform first communities where the resource is found.
Popular Democratic Movement (PDM) leader McHenry Venaani also added his voice, saying the African continent is not poor but Africans are poor. He also asked the minister to look into the sharing method to make sure Namibians benefit most.