Namibia’s Minister of Mines and Energy Tom Alweendo says value addition for the country’s resources is more critical than simply owning them.
Alweendo challenged the conventional focus on ownership and profit-sharing in mineral resource extraction, advocating for a broader perspective on maximising national benefits.
“I do agree there’s a time when we need to have the shareholding so that we can also benefit not only in other ways, but we can also manage to benefit from the equity shareholding and via dividends when it’s declared. But I think if we focus on that. We’re going to miss the point,” he told an Economic Association of Namibia Public Discussion.
He further questioned the effectiveness of equity shareholding as the sole means of benefiting from resources, suggesting a focus more on how much of the mineral’s value remains in the country.
“Maybe we need to reverse the question to say whatever minerals that we have got, what is the value of that when it is taken out? How much of that remains in the country? The value of that mineral, and how much remains in the country? And how much should it belong to the investor?” he quizzed.
Meanwhile, the Minister cautioned against overly prioritising investor interests, highlighting the risk of exploitation and unequal returns.
He underscored the importance of investment policies in Africa, stressing the need for policies that benefit both investors and host countries.
The Minister noted that investors come with the perception of Africa as a high-risk investment destination and the implications this has on negotiating investment terms.
“And sometimes, for example, the investors who normally come from the global north, they always come with an idea that investing in Africa is high risk. It doesn’t matter where it is. Because in Africa it’s high risk and therefore what I’m going to ask and therefore the return of my investment needs to be much higher than anywhere else,” he said.
In terms of the importance of balanced regulation to create a favourable investment environment. He questions whom such regulations should favour and advocates for policies that benefit both investors and host countries.
He said the challenge lies in striking a balance between creating an attractive environment for investors and ensuring that investments contribute to the host country’s development.
This comes after Namibia’s global mining ranking dropped in the 2023 Fraser Institute Annual Survey of Mining Companies, with the Chamber of Mines urging urgent policy reforms.
The country’s ranking on the Investment Attractiveness Index (IAI) fell by 3 points, prompting the Chamber to stress the critical need for improved mining policies and regulatory frameworks to enhance investor confidence and competitiveness globally.
“While Namibia remains one of Africa’s more favourable destinations, ranking 4th, it’s troubling to see our score deteriorate by three points on the absolute scale and in our global rankings. This underscores the necessity for Namibia to improve its mining policies and regulatory landscape,” stated Zebra Kasete, President of the Chamber of Mines.
