Govt warned against plans to own 51% in future mining ventures

Fredrick Buchane 

ECONOMIST Robin Sherbourne has challenged the government’s decision to own 51% in all future mining to improve local participation.

Giving an update on the state of the Namibian economy on Wednesday Sherbourne told various stakeholders that the state has no place to play  in the mining sector.

He argued that the decision by the state to increase their stake in the mining industry in future is all political rhetoric that is not practical.

“I do not think the government has a part to play in the mining sector. It is a high risk. We have had many other local players in the sector before but we need to have a study that shows whether such local participation was a success,” he said.

Sherbourne was responding to pronouncements by  Deputy Prime Minister and Minister of Industries and Mines  Nangue Ithete that the government has started consultations on the possibility of the state owning 51% in all new mining ventures.

Ithete told the mining industry at a recent mining expo that there is no better time than now to start the conversation on increased state ownership in the country’s extractive sector, which contributes close to 15% of the Gross Domestic Product (GDP).

“We have been independent for 35 years and the question is ‘should we have started this conversation at independence?’ ‘Should we have started it 20 years ago?’ ‘Or should we start it now?’ The answer is that this is a conversation that we need to have to make sure that Namibians benefit from their natural resources,”  he said.

Meanwhile Sherboure argued that the government should focus on creating a conducive investment climate to lure more jobs and create jobs in the process.

“I believe government investment in the mining sector is a high risk.

We still have Epangelo state mining company that sill has not proven anything. If the government is to play a better role in the sector maybe they should tax the industry appropriately that play a par,” he said.

Sherbourne also raised concern over the slow level of investment inflows into Namibia.

“There is a need of maybe appointing a strong investment minister who can bring in the needed investments in the future.

“If Namibia wants to be growing by 5-10% the country needs to double the rate at which the  private sector  is growing. This comes after the Economic Indicators within the country have shown a below 10% decline in the private sector’s non mining investment since 2007 which may cause a worry for the country’s GDP moving forward,” he said.