RECKLESS. Irresponsible. Irrational. Drastic. Draconian. Destabilising... these words should not be used lightly but that is exactly the sum of Mines and Energy Minister Isak Katali's surreptitious announcement of a major shift in government policy towards the mining industry.
The Government will most likely accuse the media of sensationalism and not working in the best interests of Namibia by reporting and commenting about the negative impact of the decision. But how else if not reckless and irresponsible to describe the Government's move?
Katali's announcement came almost as a "by the way" issue: Katali was motivating his ministry�s budget in the National Assembly last week Wednesday when, somewhat out of the blue, he stated that the Government's mining business company, Epangelo Mining (Pty) Ltd, will alone have all the exploration and mining rights to what have been termed "strategic minerals".
"To capitalise the operations of Epangelo Mining Company, the ministry budgeted N$5 million and Cabinet recently approved a submission to declare uranium, copper, gold, zinc and coal as strategic minerals with a view of allowing the exclusive exploration and mining of these minerals by the state mining company, so that the Namibian citizen can fully reap the benefits arising from the rich endowment of our mineral resources," said Katali.
The import of this sentence was not lost on The Namibian journalist who produced a lead story, which soon had the world mining industry abuzz as to how Namibia was headed the wrong direction as far as the issue of sourcing investment in the industry is concerned.
No doubt many Namibians will commend Minister Katali for the intention to have Namibians own, run and benefit from the resources underground. But Katali's statement is at best populist. As a policy decision it is as suicidal as his suggestion when he was deputy minister of lands that Namibia take the Zimbabwean example in land reform.
It may sound great that Namibian nationals should take over and run their own affairs, but that's not how the world operates. And it is not mere coincidence that Namibian companies that are listed on the international stock exchanges have lost massive value following Katali's policy announcement. His statement amounts to nationalisation and while on paper it looks good, this has not been known to have worked. But that's a later step in what should really concern Namibians about the government's decision to declare certain minerals the preserve of a parastatal.
The government may complain that reporting of this issue by Namibian media will only increase the negative perception in the international community, but implementing it can only discourage not only foreign investors but many Namibians who would have wanted to become "economically empowered".
Such massive shift in policy should not be made so lightly without consultation. Readers will see in today's newspaper that the government has just lost two challenges in the High Court on cases concerning investment in the country, namely Glencore/Namcor and Walmart/Massmart.
The judgements, in essence, remind the executive arm of the state not to make decisions recklessly and in an irrational manner. Any business person (that can be a Namibian, African, Asian or from the imperialist world) expect certainty, consistency, stability and surety when risking their money in a project. Business people expect their losses to come from normal business activities and natural disasters that could not have been forecast.
But wholesale, sudden and draconian decisions are a sure way to chase away the same private investors who we claim to want to attract. Government leaders often complain that the private sector is not doing enough to create jobs and improve the economy. Private businesses have retorted that many government decisions, including legislation, stand in the way of releasing potential for growth, especially among the small and medium enterprises.
Katali's announcement can only be the latest in making life unstable and difficult for businesses. How, for example, would one expect Extract Resources to raise N$12 billion for the uranium mine it had hoped to open soon while it awaits a mining license that may now be handed to Epangelo?
Surely there must be better ways, even through new laws, for Namibians to benefit from its resources than simply resorting to knee-jerk nationalisation?
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