Parliamentarians committed to maximizing mining benefits

The Standing Committee on Economics and Public Administration held a consultative meeting last week with the Ministry of Mines to seek clarification on the challenges and how the committee can help the ministry address the identified challenges.

The committee also discussed the effectiveness of Exclusive Prospecting Licenses (EPLs) in improving the standard of living of Namibians and adding value to natural resources by rights holders. The Standing Committee is mandated to monitor, investigate and make recommendations to the National Assembly on matters relating to the national economy.

The chairman of the committee, Natangwe Ithete, said in his opening statement that some challenges have been identified which are hampering the industrialization and improvement of trade in the country. “The committee has found it necessary to invite the ministry to be briefed on how the ministry intends to resolve the notorious illegal fuel trade at the Oshikango border post which has affected most petrol stations in northern Namibia. “, did he declare. declared. Further, the President noted the need for the ministry to explain government ownership and how ownership percentages are determined for investors in the mining and oil exploration industries as well as in terms of value addition. to natural resources.

He lamented outdated laws and regulations, lack of backward and forward linkages between economic sectors, inadequate coordinated planning and implementation of joint projects, fragmented business support programs, fiscal and non-fiscal support. insufficient for investment and the decline in the country’s competitive ranking. These factors, he said, are preventing Namibia from reaping maximum benefits from the mining sector.

Ithete further said that the owners were shouting at the government that they were no longer making a profit at gas stations in the north of the country due to illegal fuel smuggling. This issue is affecting employers and employees as many are losing their jobs due to gas station closures.

“Investors are losing money; we have to do something as a government collectively. How can we expect investors to repay loans if we sit back and say we can’t do anything? he asked.

Responding to questions from the committee, Mines Minister Tom Alweendo said the illegal smuggling of oil from neighboring Angola is triggered by the low cost of oil subsidized by the Angolan government.

“Angola’s fuel comes from the same market as ours. It’s only cheaper because of their government subsidies, which are about 75% of the cost. The Angolan government is unhappy because it is now subsidizing Namibian consumers,” he added. Alweendo believed that a possible long-term solution is to invest in a regional refinery. Both countries have crude oil, so it would be beneficial to invest in a refinery.

He said the ministry faced a huge challenge to find a solution due to the length and openness of the border. In addition, the ministry carried out a study which identified certain products which can be fortified. The Minister explained that this study focused on the establishment of a manufacturing plant, a strategy currently promoted by the Ministry of Industrialization.

According to Alweendo, Namibia produced $914 million (N$15 billion) worth of rough diamonds last year. The mining industry as a whole accounts for about 10% of gross domestic product (GDP), 40% of export earnings and 7% of annual government revenue. The Ministry’s Petroleum Commissioner, Maggy Shino, recently said that the upstream petroleum tax system gives Namibia the opportunity to participate in the industry with minimal risk in terms of capital requirements, as the petroleum industry is at capital intensive. “The system of royalties and concessions allows our government to obtain revenue from the start of production without disbursing capital,” she explained.

President Hage Geingob said on Monday last week during his visit to the headquarters of Namib Desert Diamonds (Namdia) in Windhoek that the inward flow of natural resource rewards would result in greater opportunities for social mobility and prosperity. and economic, where Namibia’s human capital can grow. and thrive.

Through Namdia, Geingob noted, the government can strengthen its efforts and attract investments that further promote value addition and beneficiation within the diamond industry.

2022-11-21 Maihapa Ndjavera