Mines minister Tom Alweendo emphasised that Namibia’s inability to monetise resources forces the country to depend on foreign investors who have the requisite know-how and financial resources to develop the mining sector.

Alweendo was responding to a concern raised in the National Assembly that Namibia is not fairly benefiting from her mineral and energy resources due to the majority of investors in this sector being foreign.

“I will be the first to agree that ideally, we, ourselves should be the majority investors in our natural resources. But these resources are beneficial to us when monetised. This monetisation happens when resources are taken out of the ground and sold to someone who needs it,” he explained last week in the National Assembly.

Alweendo continued request for others to perform the extraction or development is not for free, as this assistance comes in a form of investment. As such, the mines and energy minister specified that this return on investment must be worthwhile for the respective investors, adding government also sets its terms and conditions on these investments.

“Do we dogmatically insist on our terms and conditions and perhaps risk not having investors come on to our shores, or do we choose to be smart negotiators such that we still have investors coming while we work hard to improve our abilities to do it ourselves?” the minister questioned.

Alweendo reiterated it is necessary to follow a pragmatic approach when dealing with the issue of ownership. 

The Standing Committee on Economics and Public Administration recently held a consultative meeting with the ministry for clarification on how government shareholding by the mining and exploration industry is determined.

Chairperson of the committee Natangwe Ithete at this meeting said although Namibia is endowed with natural resources that could propel the country’s industrial development agenda, there are many impediments that are preventing the country and its citizens from optimally benefiting.

The committee members voiced their concern with what they called minimum benefits from natural resources that are accrued to the country, especially at the grassroots level, where the population continues to wallow in poverty, despite the discovery of valuable natural resources. 

They stated despite mining companies making massive profits, their philanthropic activities have not made any tangible and significant economic benefits to Namibians.

Namibia this year made promising oil and mineral discoveries and could soon join the lucrative league of oil-producing nations.

Moreover, the mining sector continues to be one of the largest contributors to the fiscus. 

In 2021, total company tax on profit paid to treasury was N$7.6 billion, of which N$2.4 billion (about 32%) came from the mining sector. 

Also, over 60% of exports originate from the mining sector.

Corruption

Meanwhile, Alweendo noted there is a perception that those in charge at the mines ministry are corruptly benefitting from the country’s resources, particularly regarding license issuances.

However, he stated the ministry is committed to fighting corruption: “We will appoint an auditing firm to conduct a detailed audit of our licensing process with a view to identify potential weaknesses and make recommendations how to close the identified gaps”.

The minister said another action to be taken immediately is to provide a whistle-blower box, where ministry officials and the public can provide details of potentially corrupt practices by ministry officials.

“Not only is corruption bad for economic growth and enterprises; it is also bad for ordinary citizens, especially the most vulnerable. When businesses have to pay bribes to get licenses, it unnecessarily increases their operation costs and reduces their profitability. Therefore, less taxes go to the State. Less taxes to State mean fewer public services the State can render,” said Alweendo. 

During a media briefing last week, the minister dismissed corruption allegations, saying if there is graft, it is not sanctioned by him or the system.

In a widely shared social media post, Alweendo and other officials were accused of allegedly benefitting from a N$50 million bribe, paid by a Chinese company involved in lithium mining.

The purpose of the bribe was purportedly to block the renewal of an Exclusive Prospecting licence (EPL) for Karlowa Mining Enterprises (Pty) Ltd, belonging to Timoteus Mushuna, in favour of Orange River Mining (Pty).

Alweendo vehemently denied pocketing anything from any bribes. 

- mndjavera@nepc.com.na