African leaders discuss mineral resources governance

BY ANDUALEM SISAY GESSESSE –

Uganda’s government disagreement with international companies has delayed the country from starting production of oil and its minerals resources, President Museveni said.


“We found petroleum 12 years ago. But we haven’t exploited it. I don’t agree with those companies. I say the petroleum stay there until we agree,” President Yoweri Museveni said.

He made the comment on Saturday afternoon speaking at the 6th Tana High-Level Security Forum in Africa being held in Ethiopia. The president also mentioned the reasons on why Uganda has not started producing uranium, gold and iron.

“Our iron ore deposit in the soil is one of the finest in the world – 70% pure (iron). An Indian company gave us 38 dollars per ton to take the soil and process in India. But I didn’t agree because when steal prices are high they get up to 900 dollars for a ton. ” the president said.

“We also have uranium but I don’t allow anyone to take it. When they asked me to I said no. The uranium stays in the ground until we start our own nuclear station,” President Museveni said.

Best practices
Explaining his government’s stand, “We can’t afford to keep them for years like President Museveni said,” Prime Minister Hailemariam Desalegn of Ethiopia whose, country is planning to start gas production from Ogaden area of eastern Ethiopia, said.

“We have to harness these natural resources effectively in a way that can benefit people of Africa and transform the African economy. We have to admit that there are best practices to follow.

“I believe countries like Canada, Australia and Norway have best practices from whom we can emulate. We have relations with these countries. I don’t accept the notion that the West is always bad. There is possibility that we can learn….We should be transparent,” the premier said.

He further noted that many African countries have not benefiting from the mining contracts they signed. ” I recently asked at the G7 meeting how they can assist us to build the capacities of African countries to understand the complex mining contracts before signing them with the multinational companies,” Hailemariam said, posing the same question to the Canadian who was participating in the Tana Forum.

The former President of Nigeria and Chairperson of Tana Forum, Olusegun Obassanjo said, “When it comes to proper natural resources management African countries need to follow a holistic approach in planning and execution like President Museveni said.”

Africa’s natural resources

The scale and diversity of Africa’s natural resource endowments reveal that the continent alone has 12% of global oil reserves, 40% of global gold deposits, and about two thirds of the world’s most suitable land for farming and forests.

Unfortunately, and for a plethora of reasons, the flipside to this unprecedented potential is that the continent has not been able to fully maximise the developmental benefits that should have accrued from exploiting the resources.  For example, the mispricing of natural resources in Africa leads to the loss of $50 billion per year, more than Africa’s combined foreign direct investment and overseas development aid.

In addition, according to an Oxfam estimate, more than US$18 billion per year is lost through resource-related conflicts in Africa, not including indirect costs.

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