Harare, Zimbabwe (News of the South)-Rampant corruption and political interference has made Zimbabwe’s mining a very unattractive sector globally reducing a lucrative sector into a non-entity according to a Transparency International research report.
According to a paper published by the global organisation released last week titled, Policy Note on Corruption Risks in Awarding of Mining Contracts, Permits and Licenses in Zimbabwe, the country has lost out more due to its conduct in the sector.
“Zimbabwe’s mining sector is unattractive to investors. This is evidenced by the fact that no one has applied for an Exclusive Prospecting Order (EPO) in close to three years.
“Zimbabwe is ranked ninth least attractive mining jurisdiction for investment by the Fraser Institute and is ranked 96/104 in the investment Attractiveness Index a score of 41.8/100.
“This is despite the country being rated as having the geological potential to be the 67th most attractive mining jurisdiction in the world”, it said.
The EPO is the license granted for large scale mining exploration with the other one being the prospecting license which is suitable for small scale mining operations.
The country has since had its array of diamond mining companies merged into a single entity after rampant corruption led to the embezzling of more than US$15 billion, a figure which more than triples the nation’s paltry GDP.
Transparency says better governance of the sector will make it thrive.
“Nothwistanding the governance challenges that plague the sector, the sectors potential contribution to the economy and the socio-economic development fat outweighs its current contribution”
“A 2009 study by UNDP notes that, everything being equal, Zimbabwe’s precious minerals have the potential to generate export earnings in the region of US$2 billion annually over the medium term and upwards of US$5 billion a year within 5 years”, it says.
This, by far, would make mining both the largest exporter and earner of revenue, a realisation that has been hampered by systemic and institutional corruption.
Dr James Tsabora, a Senior Research Consultant on natural resource governance says there is also need for the guidance of principles in the enactment of mining laws.
“There are no principles underpinning Zimbabwe’s mining law. This is because the laws are out of date, and the amendments have only addressed other issues in a piecemeal fashion.
“There is needs for these principles in our Mines and Minerals Act to provide guidance, direction and the backbone of our mining legal framework”, he said.
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