STAFF REPORTER
Swapo’s call for increased state control over Namibia’s natural resources has renewed debate about the government’s role in the country’s extraction industries.
The Party’s Secretary General Sophia Shaningwa last month proposed that the state take greater ownership of natural assets as a strategy to tackle poverty and inequality. However, not all political voices are aligned with this vision.
Popular Democratic Movement (PDM) President McHenry Venaani this week said the government should consider implementing a community share ownership structure when embarking on agreements with multinationals planning to invest in the mining sector.
The opposition lawmaker told Namibia Business Review that the PDM does not support socialist policies in which the government owns major stakes in natural resources.
“We don’t believe in a policy of nationalisation, where you want the state to have a larger stake in the means of production. We support a model where communities get stakes in the mining sector. We are one of the countries in the world where communities do not benefit from the mining sector,” Venaani said.
He likened Shaningwa’s suggestions to the promotion of a socialist policy of nationalisation, which he said can be detrimental to Namibia’s investment appeal.
Venaani said that Namibians will benefit more from policies that stipulate that companies operating in the country should provide reasonable stakes to local communities to better develop education infrastructure, healthcare and other social amenities.
“If you look at the South African example of the platinum mines, communities are earning as much as N$300 million to N$400 million from the community share ownership structure. So, we would support more equity of Namibian participants in the mining sector.
“Supporting government participation in the mining sector is as good as supporting a socialist policy. We support a free market economy,” Venaani said.
Shaningwa said that the current ownership structure in most Namibian mines does not allow the government to improve the plight of the majority of the country’s impoverished citizens.
“Increased state ownership in natural resources is a key component of the Swapo Party’s policy plan,” she said.
STRICT CONTROL
Labour Research Analyst and Social Justice Activist Herbert Jauch told Namibia Business Review there is a need to balance increased state ownership and control of national resources with policies to curb corruption and the monopolisation of resources by the elite.
“If you do not have national control of your resources, you will only get crumbs. If you have an approach where you hand over your resources to multinationals, you will continue to get crumbs. Whether increased ownership by the government will improve the lives of people depends on the type of government you have,” he said.
He highlighted that in some instances where state control was not backed by solid policies, resource nationalisation in certain African countries has created what is dubbed the ‘resource curse’
“If you see the examples of Angola and Nigeria, state involvement created the enrichment of a certain elite. For Namibia to benefit everyone, you need to put in place policies that make sure that everyone gets a financial benefit, and not only a few. So yes, the state needs greater control of national resources but must make sure that they implement policies like the Basic Income Grant that benefits everyone,” he said.
Jauch noted that the Namibian government has previously been ‘bullied’ by investors when pushing for greater control of resources.
“The argument that increased state participation in natural resources will scare away investment has sometimes been pushed by the investors themselves, who want to operate like a mafia. In the past there were instances where the mining industry has pushed back and told the government that if they push for increased control, the country will be blacklisted. This is not always the usual result because the country owns the resource,” Jauch added.
STEP IN THE RIGHT DIRECTION
Social Justice Activist Rinaani Musutua said Swapo’s push for increased control of national resources is a move in the right direction.
“I share the same sentiment as that of the Swapo Party Secretary General, Sophia Shaningwa, that Namibia should push for a larger stake in natural resource ownership. This will assist us to optimise more earnings from our natural resources,” she said.
She highlighted that Namibia’s mobilisation of financial resources from the mining sector at the current level is insufficient.
“Royalties paid by mining companies in Namibia (3%) are way too low compared to other mining countries (South Africa, Canada, and Australia). Export levies charged by Namibia are also way too low, at less than 2% on average for the 18 different mineral commodities it exports. Mining licence fees are low compared to, for example, Angola,” she said.
She argued that Namibia needs to implement policies that compel foreign corporations to provide an increased share to the local economy.
“There is no economic independence without control of our own natural resources. I would even go a step further to say that we should nationalise our natural resources for better control like Algeria, Mexico, Saudi Arabia and Bolivia have done with their oil and gas. It is completely unacceptable that 88% of our mines are privatised and controlled by foreign-owned companies. The fact that, most of the time, Namibia only gains a 3% to 10% share in those mines means that we lose out on huge profits, as if the minerals are not ours,” she added.
Political Analyst Ndumba Kamwanyah told Namibia Business Review he agrees that pushing for a larger state stake can help reduce inequality.
“I endorse it, but if the policy lacks clarity or appears hostile to business, it may drive investors away. Namibia needs investment, and too much state control without capacity can hurt both growth and development,” Kamwanyah said.
He highlighted a clear link between poor control of national resources and alarmingly high levels of poverty, and said despite Namibia’s rich resources, many still live below the poverty line and lack access to basic services.
“State control is important, but only if the state is efficient and transparent. Without strong systems, processes and institutions of control, it can lead to mismanagement, corruption, and lost opportunities.
“The Namibian government has underperformed miserably. Resource allocations have often favoured political elites and foreign companies, and revenue management has lacked transparency. The country could have earned more and invested better in service delivery and public services,” he added.
WAITING GAME
Independent Patriots for Change (IPC) national spokesperson and leader of the official opposition in parliament Imms Nashinge said the party will allow current consultations on the improvement of Namibia’s legislation to conclude before airing their views.
“As you may know, the current administration urged all citizens to identify laws that are impeding our progress as a nation. The Ministry of Justice and Labour Relations recently called for submissions from all concerned, which is ending on 17 June.
“I would advise that we first allow that process to conclude, which we believe will guide the way forward in all regards,” he said.
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COMMENTS
Government, Regional and Community equity participation in mineral development projects, are possible, provided a correct formula is found and applied. The current set-up is not sustainable, at all.