The government has been advised to take concrete measures that will empower local people to participate fully in exploiting the country’s natural resources for inclusive economic development.
Speaking in Dar es Salaam yesterday, three from African Heads of State Benjamin Mkapa (Tanzania), Dr Festus Mogae (Botswana) and Olusegun Obasanjo (Nigeria) said the only way to achieve sustained economic growth is by ensuring that nationals are empowered and given priority in extraction of natural resources.
At the meeting organised by Uongozi Institute were ministers, government officials and the Tanzania Private Sector Foundation Chairperson Dr Reginald Mengi who has spearheaded the campaign to empower Tanzanians to participate in the oil and gas sector.
Also present were Chief Executive Officers (CEOs) of various public and private institutions, representatives of UN agencies and Civil Society Organizations (CSOs) and ITV/Radio One Managing Director Joyce Mhaville.
Former Nigerian President Obasanjo said the government has to make ‘tough’ decisions in empowering its nationals.
Obasanjo explained that major problems that African countries face today result from poverty, corruption and massive unemployment, not religious conflicts.
Revisiting the case of his country he said as part of empowering people, Nigeria adopted Oil and Gas policy which favoured the local people.
“In addition to the Nigerian Development Empowerment Plan, it was directed that the state must have 75 percent share in ownership of the natural resources,” he said.
He stressed that in response to poverty reduction, the government subsidised agro-inputs by 70 percent and at the same time provided minimum living wage to enable poor communities benefit from the development plans.
He admitted that there are ways to bring people together even in countries facing conflict, saying Africa has to look for a window to establish ‘An African College of Negotiation’ for it to fully benefit from its vast natural resources.
Unlike Nigeria’s economy which is heavily supported by oil and gas, 50 percent of Botswana’s GDP comes from mineral resources, especially diamonds.
Former Botswana President Festus Mogae said its economic achievements are grounded on the ‘tradition of consultation’ which helped the country to build a strong economy basically focused on the people.
Mogae said his country had gone ahead to seize mineral deposits which were initially owned by tribes and exploited them for the benefit of the whole country.
He said through consultations it was proclaimed by government that all revenues from natural resources would be used for the nation’s development.
“We provided physical infrastructure, education, water and health facilities as key priorities to give back a big thank you to the people,” he said. The revenues are realised in the form of taxes, royalties and dividends.
“…so the state ownership in the mineral industry is more than 75 percent,” said Mogae who is also winner of the Mo Ibrahim Prize on good governance.
Tanzania which according to fresh reports has 43trillion cubic feet (tcf) of natural gas reserves is yet to exploit its full minerals potential.
The sector currently contributes less than four percent to the Gross Domestic Product.
Former President Mkapa said there is no way out of poverty for a country that is heavily dependent on foreign aid and development partners.
“I hate glorification of aid,” he said, adding: “We need to reform our policies, economic strategy and its implementation to stabilise our economy.”
Mkapa said the country and the continent have to establish independent think tanks as well as hire competent negotiators to economically advance.
He quashed concerns by some senior government leaders that natural resources are not capital in negotiations, saying resources are necessary, effective and they represent capital.
He was reacting to a concern raised by Dr Reginald Mengi at the meeting that there was confusion over whether natural resources could be regarded as capital in negotiations of investment contracts.
Dr Mengi pointed out that because of this confusion some executives fear to empower wananchi to participate in the recently discovered oil and gas in the country.