Business Development Mining

EITI topical at Zimbabwe Alternative Mining Indaba

Participants at the Zimbabwe Alternative Mining Indaba

By Zimbabwe Coalition on Debt and Development

The call for the Extractive Industry Transparency Initiative (EITI) has been topical during the ongoing Zimbabwe Alternative Mining Indaba that has been running from the 4th of October to today the 8th under the theme “Development Speaks: Amplifying Community Voices for improved accountability and transparency in natural resources governance in Zimbabwe”.

The Extractive Industries Transparency Initiative is a global standard for the good governance of oil, gas, and mineral resources. It seeks to address the key governance issues in the extractive sectors.

The Extractive Industries Transparency Initiative (EITI) implements the global standard to promote the open and accountable management of oil, gas and mineral resources.

The EITI Standard requires the disclosure of information along the extractive industry value chain from the point of extraction, to how revenues make their way through the government, and how they benefit the public. By doing so, the EITI seeks to strengthen public and corporate governance, promote understanding of natural resource management, and provide the data to inform reforms for greater transparency and accountability in the extractives sector.

Countries who want to improve the way they manage their natural resources can apply to become an implementing country. To achieve satisfactory progress on implementing the Standard, they need to meet requirements on transparency and accountability.

To become an EITI implementing country, a country must complete five sign-up steps. These steps relate to the commitment of the government, company, and civil society engagement, the establishment of a multi-stakeholder group, and agreement on an EITI work plan.

It is important to note that the EITI concept was adopted against the background of the natural resource curse bedevilling most mineral-rich jurisdictions. In Africa, Mozambique, Zambia, Angola, Tanzania, Malawi, Democratic Republic of Congo (DRC), and Madagascar have adopted EITI but in the case of Zimbabwe, talks around the adoption of EITI in Zimbabwe commenced in 2010 but 11 years down the line, nothing has materialized.
Zimbabwe has been unwilling and dragging its feet to joining EITI although pronouncements of its intentions to do so stretches to over a decade now.
More recently, The Minister of Finance in the 2019 Budget Statement mentioned that; “In order to move along with international best practices on achieving transparency in management of natural resources, Government would want to be a member of the Extractive Industries Transparency Initiative (EITI) as soon as possible. Membership is critical in order for the country to benefit from strengthened public and corporate governance, promote understanding of natural resource management, and provide the data that guide reforms for greater transparency and accountability in the extractives sector”.

At the ZAMI, presenter after presenter profiled how Zimbabwe is endowed with a wide variety of valuable natural resources which if managed well has the potential to unlock sustainable socio-economic development.

Nevertheless, the discussion was dominated by how the mining sector’s potential to turn around the economic fortunes of an impoverished nation is undermined by poor governance characterised by corruption, irresponsible mining, and mineral resource leakages in general.

Mining host communities lamented displacements, lack of development including poor public service delivery in their areas despite them being endowed with vast mineral resources and highlighted that this points out to poor governance of the extractive sector.

The Government of Zimbabwe’s ambitious vision of transforming the mining sector into a USD12 billion industry by 2023 is difficult to realise if the transparency challenges in the sector persist and as most speakers argued during the ZAMI 2021, the EITI presents a key entry point in addressing the transparency and accountability deficits in the sector.

Furthermore, the country envisions an upper-middle-income economic status by 2030 whose hopes are pinned on the mining sector. Promising as it seems, the success or failure of this mining vision is heavily dependent upon the manner in which the country manages its resources.

Transparency and accountability remain the bedrock for unlocking the potential of the mining sector to transform the country’s economy.

According to the Ministry of Finance and Economic Development, Zimbabwe has been losing about $1.8billion of mineral revenues through smuggling.  There is therefore urgent need to put in place decisive measures to plug the loopholes.

The Potential Benefits of EITI to Zimbabwe include addressing mining-related corruption; improving revenue collection and public service delivery; attracting more Foreign Direct Investment (FDI); promoting transparency and accountability in mineral revenue governance; helping the rebuilding of mining stakeholder’s trust in the government; preventing resource backed conflicts; strengthening CSOs and Community Based Organisations (CBOs) engagement with government and mining companies; and overall strengthening of democracy and good governance.

Although there was general consensus on the need to join the EITI, the ZAMI 2021 also noted the political challenges of doing so.
Besides the political intonations that EITI is a western agenda by some of the hardliners in government, there are also concerns that the current political, economic and legal environment is not ideal given the institutional weaknesses and global political pressures, such as smart sanctions, that make joining the EITI legally sound but politically imprudent[1].
However the ZAMI 2021 showed resolve and dedication to push the government to still join EITI because of the immense benefits that it has for the country and such should be based on the strong constitutional provisions on transparency and accountability, effective law enforcement, supportive relationships between government and civil society (civic engagement) as demonstrated in the decade long engagements through the ZAMI.

About the author

Byron Adonis Mutingwende