Enclaves of wealth and hinterlands of discontent: foreign mining companies in Africa's development

This report comprises 8 papers that were presented at a conference organised in Ghana in 2008, on the theme: ‘Beyond Foreign Direct Investment in Africa’s Mining Sector’. The papers explore various financial and practical aspects of mining sector reform in sub-Saharan Africa.

The report points that national policies on mining in Africa have not been adequate to optimise the benefits or translate marginal benefits into building the productive capacities of local communities in mining areas. Thus, in order to enhance the developmental potential of mining, the authors suggest the renegotiation of mining contracts and the revision of mining regimes.

The paper’s main findings can be summarised as follows: 

• the available mineable land could not cope with the ever-increasing numbers of people entering the industry
• through training of small-scale miners on entrepreneurial skills, a number of operators have diversified their business ventures to include non-mining activities
• a mining boom will not lead to a process of economic diversification capable of generating long-term sustainable development in the absence of effective public policies which encourage such a process.
  

Recommendations include:

• developing an integrated national and regional strategy for mining
• consider the creation of a permanent mineral resource investment fund backed by national law and managed by a defined institution
• improve the marginal gains by considering an upward review of the levels of some taxes in the sector 
• formulate fiscal devolution principles, which transfer/reverse revenue sharing arrangements to the local centers, in consistent with the larger integrated national development agenda
• consider diversification of certain minerals which allows community collective investment, while extending alternative livelihood projects to other mining communities
• incorporating artisanal miners into concessions as equal partners who could not be expelled under any circumstances.