Good morning Ladies and Gentlemen,
Thank you for having me here today…
I am delighted to launch EADB’s sixth workshop for public sector legal professionals to strengthen East Africa’s negotiation capacity in deals related to the extractives industry.
At EADB, we believe that well drafted and carefully negotiated mining exploration and development agreements are key to ensure that East Africa’s natural resource wealth benefits our socio-economic development. Indeed, by negotiating strategic mining exploration and exploitation agreements, the government may maximize economic growth, domestic job creation and export and government revenue.
Sadly, East Africa’s natural resource wealth has historically not always benefitted the region. Globally, natural resource wealth tends to benefit a small majority, exacerbate income inequality and is rarely invested back into the country where the natural resource originated. However, natural resources are a public good that if well managed have the potential to drive economic development, and if well invested can actually reduce income inequality.
As East African countries continue to discover natural resources, amongst the many that the region is already known to be wealthy in, such as oil and gas in Kenya, gold and coltan in Rwanda, diamonds and natural gas in Tanzania and oil and gold in Uganda, it is increasingly critical that host countries are able to derive tangible benefits from the exploitation of their natural resources.
Foreign firms should be incentivized to refine natural resources in the host country, employing local labour and developing skilled labour to work in professional positions. This would have an enormous socio-economic impact through providing employment, increasing the skill level of the domestic labour force and increasing the revenue received by national governments.
Domestic firms should be provided with additional incentives to establish themselves as internationally competitive mining businesses so as to reduce the dominance of international mining firms in the region. However, domestic mining firms should also be held accountable to international standards and to invest in their host economy.
In addition to developing local value addition, export revenue and skilled job creation, both foreign and domestic mining companies should be compelled to operate according to strict environmental and social standards. East Africa’s significant natural resource wealth not only includes valuable minerals, but also includes a rich biodiversity that encompasses endangered animals and vegetation that must be protected. As the region develops national airlines and targets growth in the tourism sector, the regions biodiversity must be protected for current and future generations.
Finally, governments themselves must also be held accountable through intelligent mining exploration and exploitation agreements. Increasing mineral revenue will massively benefit East African governments through reducing currently prevailing fiscal and current account deficits and through providing additional revenue for governments to invest. However, national governments must be compelled to invest sensibly, to ensure that natural resource wealth is distributed evenly and that the benefits accrue to current and future generations, even after East Africa’s natural resources have been depleted. The upcoming growth in natural resource revenue provides an enormous opportunity for governments to invest in socio-economic development with minimal debt accumulation and I compel you here today to ensure that the region’s natural resource wealth is maximized by your governments and invested to its maximum potential.
On that note, I welcome you again to Dar es Salaam; I am delighted to launch this vital training session and urge you to make the most of the opportunity.
Good morning Ladies and Gentlemen,