Download 7. Overview of the 2016 Zimbabwe Mining Sector Madziva

Perspectives on the
importance of Mining to
National Economic Planning
By: Innocent Madziva
Deputy Director, Economic Modelling
MEFMI candidate Fellow-Natural Resources Management
Ministry of Macro-Economic Planning & Investment Promotion
E-mail: [email protected]
Presentation Outline
Introduction
Macroeconomic Framework
Importance of Mining to National Economic
Planning
Mining success in National Economic Planning
Conclusion
Introduction
In National Economic Planning, minerals are usually
given a special attention because: they are a waste resource
they belong to the nation (Section 3 (2) j of the
new Constitution of Zimbabwe)
The role of Government is to manage the sustainable
exploitation of these resources in order to maximise
the socio-economic benefits for both the current and
future generations
Introduction Cont’
 ZIMASSET (2013-2018) places the mining sector
as a key driver of economic growth
 Since 2009, the sector has been a major foreign
currency earner (contributing more than 50%).
 The mining sector in Zimbabwe is one of the few
sectors that has relatively performed well (in terms
of contribution to GDP) and in line with ZIMASSET
targets over the period 2013 to date.
4
5/13/15
2012
2013
2014
2015
2016
2016
Actual
Actual
Actual
Estimate
Initial
Rev. Prj
7.8
-2.6
-1.3
11.7
6.5
-0.6
1.5
5.0
3.9
11.3
0.7
3.9
7.0
3.4
2.9
0.5
6.0
4.5
23.0
9.0
-3.4
11.4
-5.1
3.2
5.4
6.9
7.7
4.7
2.5
1.1
6.3
3.9
1.8
2.2
3.8
-5.2
5.1
0.4
9.2
0.2
6.5
-5.5
4.0
4.6
3.5
4.0
1.9
1.2
4.2
-0.7
2.0
1.1
-9.9
7.0
14.0
6.5
0.5
7.5
-21.8
4.5
6.4
3.4
2.4
3.0
0.0
2.6
0.4
1.0
1.4
-4.2
7.0
13.2
6.5
0.2
7.5
-21.8
1.8
2.0
2.0
2.8
1.5
-5.0
2.6
0.4
1.0
1.2
Macro-Economic Framework
Agriculture, hunting and fishing
Agriculture (ZIMASSET)
Mining and quarrying
8.0
Mining and quarrying (ZIMASSET)
Manufacturing
5.3
Manufacturing (ZIMASSET)
Electricity and water
Construction
Finance and insurance
Real estate
Distribution, hotels and restaurants
Transport and communication
Public administration
Education
Health
Domestic services
0.3
23.5
28.0
59.0
4.3
6.7
19.1
38.1
7.7
-3.5
10.6
“
GDP at market prices
Source: Ministry of Macro-Economic Planning & Investment Promotion, ZIMSTAT, Ministry of
Finance, RBZ and ZIMASSET
Importance of Mining to National
Economic Planning
Mining and Poverty Reduction
Both large-scale mining and artisanal
and small-scale mining reduce poverty
through the linkages four dimensions
of poverty which are economic
opportunity, capability, security, and
empowerment
Importance of Mining to National
Economic Planning
Fiscal impact and foreign exchange
income.
Mining can be an important source of foreign
exchange and fiscal receipts for governments.
When managed well, the net foreign exchange and
taxes generated by mining can be used by
governments as an engine for overall economic
growth and as a funding source for social sector
and poverty reduction programs
Importance of Mining to National
Economic Planning
Local economic development
Large mining operations often invest
substantially in local economic development
through training, social services, and public
goods such as clean water, transport, energy,
and other infrastructure
Importance of Mining to National
Economic Planning
Improved land-use planning
Geoscience and mapping data collected for
mining purposes can contribute to improved
land-use planning. This can benefit the poor
by helping identify and address issues related
to competing land uses, which in turn helps
to avert negative impacts on agricultural
production and food security.
Importance of Mining to National
Economic Planning
Source of energy
In countries with significant coal
resources, such as China, India, Zimbabwe
and South Africa, coal is an important
source of energy contributing to economic
growth.
Mining success in National
Economic Planning
Emperical evidence has shown that mining
success does not only depend on the number of
minerals that a country has nor the grades.
For in countries with an overall poor governance
record and weak institutions, mineral wealth
frequently does not translate into development.
Instead, sudden mineral export booms in many
cases led to severe economic imbalances, rising
corruption and armed conflict
Conclusion
Success tend to depend on:Long term Economic Planning and de-linking Economic
cycles with Political cycles
Negotiation of Contracts and Ownership structures
Strong institutions
Mineral governance-Transparency and accountability
Efficient and Responsive Mining Fiscal Regimes
Prudent management of Mining revenue-Survival beyond
extraction
Norwegian Experience
Botswana Model
Others
Government of
Botswana
Anglo American
15%
De Beers
Investments
De Beers Societe
Anonyme (Lux)
DBsa UK Ltd
(Diamond
Trading
Company)
Exploration
holding
structure
De Beers
Canada
50%
50%
DTC
Botswana
Debswana
50%
Corporate taxes
50% of dividends
80.8% of profits
85%
Joint control
Namdeb
50%
De Beers Consolidated
Mines (South Africa)
Thank You!