Press Release No. 38/1997

Dialogue in Durban: African Ministers of Energy and Mineral Resources Make Common Cause with Development Partners

Addis Ababa, 24 November 1997: Thirty-four member States of the United Nations Commission for Africa (ECA) have concluded a 3-day meeting from 22-24 November 1997 in Durban, South Africa. It was the Second Conference of African Ministers responsible for the development of mineral and energy resources in Africa.

Besides African governments and other governmental organisations the Conference featured representatives from private development operators and investors, mineral-based product industrialists, minerals and energy consumer associations, chambers of mines, research institutions and UN agencies.

Deputy President of South Africa Thabo Mbeki said in his opening statement that the challenge facing Africa was one of capability for exploiting its natural resources in the 21st Century.

The Conference reviewed progress made since 1995, sought to encourage co-operation among all development actors, and discussed the roles of government and the private sector.

It also recognised the need for African cooperation and the urgency of putting in place policies and strategies to encourage the local and external private sector to participate more effectively in development.

Mr. K. Y. Amoako in a keynote address put the mining and energy sub-sectors in the context of African socio-economic development.

"They contribute to the ultimate goal of eradicating poverty", he stated, "particularly in the rural areas where 90% of Africans lived".

He observed that, although mining and energy were important contributors to foreign exchange earnings and fiscal revenues, the industries remained concentrated in the hands of a few.

The ECA Executive Secretary, however, noted that Africa's share of private direct investment in mining was projected to reach 20% of global capital inexploration expenditure by the year 2000. Key indicators of this growth, he said, included the opening of new mines, notably the Sadlola Gold mine in Mali and the Hartlay Platinum mine in Zimbabwe. Ashanti Goldfields of Ghana has also acquired several mines in both Africa and elsewhere.

Mr. K.Y. Amoako cited instances of a move towards regionalism through the geographical migration of companies across borders. Protocols were being adopted in the energy sector to advance cooperation among African States which augured well for the future.

Turning to privatization Mr. K.Y. Amoako stated that while in the energy sector the share of privately owned power assets was increasing; and while a number of African countries had updated their mining codes to attract the private sector, difficulties of asset evaluation, labour redundancy and acceptance of private sector monopoly hampered privatization efforts. "Privatization and attracting foreign investment", he said " required political will and were retarded by foreign exchange controls and inadequate legal and regulatory framework".

The Conference adopted the Durban Declaration on sub-regional and regional cooperation for the development and efficient utilization of energy and mineral resources in Africa.

Noting that those economic reforms that Africa had embarked upon during the last decade had yielded encouragingly positive growth rates, the Declaration: Commits Africa to the deepening of on-going reforms.

• Notes the need for the creation of a conducive environment for the flow of domestic and foreign investment to the energy and mining sector, while building the infrastructural base.
• Calls for African economies to adopt appropriate macroeconomic policiesand incentive packages in order to enhance competitiveness particularly those of mining and energy.
• Points out the lop-sided nature of current privatization trends and their bias towards commercial operation of utilities and a too limited range of minerals despite the increase in investment flows into the mineral and energy sector, with its implications for healthy competition and efficiency.
• Seeks an increased balance in private investment in energy-generating capacities and in the exploration, prospecting, exploitation and processing of a broader ranger of minerals.
• Expresses concern at the low level of per capita consumption of minerals and energy in Africa and at the dissipation of individual country efforts in the exploration, exploitation and efficient utilization of energy and mineral resources. Hence the commitment to strengthen intra-regional co-operation.
• Appeals for co-operation, among various regional and international organizations in support of energy and mineral programmes in Africa. Commits African States to reflect these measures in their national plans of action, and in the programmes of their sub-regional groupings.
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A framework for monitoring will be put in place in accordance with the Durban Declaration.