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High Level Expert Group Meeting Report & Recommendations

“Towards the Post 2015 Development Agenda and the African Union Agenda 2063- Enhancing the management of Africa’s Extractive industries to promote sustainable

and inclusive industrial development, structural economic transformation and inclusive and resilient economic growth”

24 February, 2015, UN Headquarters, New York (Conference Room 6)

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Overview of Contents

I – Introduction, p. 3

II- Summary of the substantive sessions

- Session 1: Opening, pp. 4-7

- Session Two: African Social and Economic transformation through inclusive and

sustainable industrial development, pp. 8-13

- Session Three: Implementing the African Mining Vision in the context of Africa’s

development aspirations: between challenges and opportunities, pp. 14-20

- Session 4: Closing, pp. 21

III – Preliminary Recommendations

- Salient points of the discussion, pp. 22-24

- Preliminary recommendations, pp. 24-26

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I – Introduction

The meeting took place on the 24th of February 2015 and was organised by the Office of the Special Adviser on Africa (OSAA) in collaboration with the African Union Commission (AUC), the African Development Bank (AfDB), the UN Economic Commission for Africa (ECA), the United Nations Industrial Development Organization (UNIDO) and the United Nations Department of Public Information (DPI). Given that the realisation of the objectives of the African Union Agenda 2063 adopted at the recent African Union Summit in Addis Ababa, Ethiopia is premised on the optimisation of Africa’s natural resources for the benefit of its people, proper management of the natural resources is key to Africa’s sustainable development. As part of its mandate, OSAA is supporting ongoing efforts of the African countries and the African Union to maximize the developmental impact of natural resources through the promotion of inclusive and sustainable industrialization and value addition. In this regard, the United Nations Office of the Special Adviser on Africa (OSAA) convened a High-level Expert Group Meeting with the theme: “Towards the Post 2015 Development Agenda and the African Union Agenda 2063- Enhancing the management of Africa’s Extractive industries to promote inclusive and sustainable industrial development, structural economic transformation and inclusive and resilient economic growth. The specific objectives of the meeting were to:

1. Assess progress, achievements and challenges in the implementation of the AMV and

AIDA, and explore prospects and opportunities for accelerating its implementation towards Africa’s structural transformation.

2. Draw out relevant lessons and best practices from the implementation of the AMV and AIDA to inform the discourse on the role of value addition through inclusive and sustainable industrial development as a means to promoting job creation and eliminating poverty, particularly in the context of the Post-2015 Development Agenda, the SDGs and the African Union Agenda 2063.

3. Identify concrete recommendations that would greatly contribute towards strengthening the institutional capacity of the African Union to implement AIDA and the AMV.

4. Seize the opportunity to build and renew partnerships among stakeholders,

governments, and the donor partners with the intention to facilitate the implementation of the AMV and the AIDA.

The meeting was attended by representatives of permanent missions accredited to the United Nations, Government Officials from African countries, United Nations officials, private sector representatives, NGOs, academia and the media.

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II – Summary of the substantive sessions

Session One: Opening

Welcoming all participants in his opening remarks, Under-Secretary General and Special

Adviser on Africa, Mr. Maged Abdelaziz, underscored the timeliness of the High-level meeting, as

it is convened at a time when both the United Nations and the African Union (AU) are stepping up

efforts continentally and globally to advance inclusive and sustainable development. Mr. Abdelaziz

drew attention to the recent adoption by the African Heads of State and Government of the AU

Agenda 2063, which represents the Continent’s strategic framework for its future socio-economic

transformation. Similarly, he referenced the ongoing negotiations at the United Nations on the post-

2015 development agenda, which would serve as a blue print for global development cooperation and

sustainable development efforts in the future.

Mr. Abdelaziz underlined that both agendas prioritize industrialization and value addition to

reduce poverty and create employment, particularly for women and youth. The AU agenda 2063

adopts a people-centred approach by emphasizing inclusive growth and sustainable development, in

which the extractive industry sector can play a large role. He noted that the representatives of

governments, the private sector, civil society organizations and the academic community participating

in the meeting are all important assets that will strengthen the people-centred approach to guide

development efforts at all levels. Mr. Abdelaziz informed the meeting that discussions at the meeting

would lead to recommendations to be shared with the General Assembly and the Economic and Social

Council, and would also provide an input to the negotiations on the post-2015 development agenda

and the shaping of the first ten-year action plan for Agenda 2063.

In his introductory remarks, delivered on behalf of the President of the General Assembly,

Mr. Der Kogda, Permanent Representative of Burkina Faso to the United Nations, stated that

natural resources were among the basic pillars that African countries depend upon and that the

increasing demands for commodities allowed several African countries to witness marked growth in

their export over the past decade. He noted that African countries in 2009 adopted the African Mining

Vision, abandoned the then current model for resources and moved on to one which allowed them to

boost overall inclusive growth throughout the continent. He stressed that African countries have taken

the correct steps towards beginning to strengthen extractive industries through human resources and

technology. However, he noted that some challenges remain, such as lack of adequate investment and

infrastructure. Mr. Der Kogda recommended that African countries ensure that extractive industries

play a mobilizing role for economic development, mainstreamed throughout their respective

economies, to enable the continent to reduce dependency and promote growth. He also noted that

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African countries need to take adequate measures to protect the environment and promote sustainable

and inclusive development. Mr. Kogda lastly recommended that African countries adopt a regional

policy that support the development of trans-boundary infrastructure and promote trade, improve

productivity and partnerships and stressed that Africa needs the international community to move in

this direction to bring about transparency and proper management of natural resources.

Her Excellency Ms. Fatima Haram Acyl, the African Union Commissioner for Trade

and Industry, stressed the importance of the mineral sector for job creation, especially for youth, as

well as for poverty eradication, inclusive growth, and sustainable development through social and

economic transformation. She described Agenda 2063 as the global strategic framework which would

optimize the use of African resources for the people and noted that Agenda 2063 was an opportunity

for African countries to learn from the past and build a strategic framework to obtain social and

economic transformation for the next fifty years. In particular, Ms. Acyl referred to Agenda 2063’s

goal to “Silence the guns by 2020” and that Africa should take control of its resources in order to gain

optimum benefit. She stated that the Continent’s Mining Vision aims to encourage African countries

to achieve social and economic development through the control of their resources and also to

encourage Countries to develop mining policies at the national, sub-regional and continental levels.

The Chair of the African Group for the month of February, the Permanent

Representative of the Republic of Mozambique to the United Nations, His Excellency, Mr.

Antonio Gumende, noted that Africa is known as the richest region in the world in terms of natural

resources. Ironically, it is also classified as the least economically developed continent. It had

generally derived limited resources from its vast mineral wealth. He underlined that African countries

have committed to promoting inclusive development that is driven and managed by its own citizens.

He stressed that African growth has been propelled by exportation of raw-commodities and it was

clear that this trend had deprived the continent of a better share of global trade and concluded that

there is no doubt that industrialization will lead to development in Africa and economic policies

should create businesses to encourage trade and diversification.

The Chief Executive Officer of the NEPAD Agency, His Excellency, Dr. Ibrahim Assane

Mayaki , noted that the main challenge was how to industrialize Africa and increase its productive

capacity and underscored that this will happen through industrialization and sound industrial policy.

He added that a developmental approach in that regard is essential and gave the example of the

construction of a gas pipeline between Abuja and Algiers, which would boost regional integration,

pointing out that this reflects how Africa is putting its house in order. The conditions for success

which he quoted included institutional quality, as resources should be managed in such a way that

they benefit the majority of the population. He stressed that sound resource governance requires

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accountability to the public and geographical mapping is significant because it will give the

population an opportunity to be informed. In that regard, he underlined the importance of building

coalitions with the media and members of parliaments.

Under-Secretary-General and Special Envoy for the Great Lakes Region, Mr. Said

Djinnit emphasized the interlinkages between natural resources and conflict on the African continent

and noted that illegal exploitation of national resources deprives countries of revenues, which should

have been used for developmental purposes. He referred to estimates that $1 billion have been lost by

the DRC annually to criminal syndicates and armed groups through illegal exploitation of natural

resources, whose criminal activities led to gross human rights violations and recruitment of youth by

over 30 illegal armed groups operating in the eastern DRC, with disastrous effects for the Great Lakes

Region. He underscored that the effective management of natural resources is therefore central to the

Peace, Security and Cooperation Framework for the Democratic Republic of the Congo and the Great

lakes Region.

Ms. Fatima Denton, Director of the Special Initiative Division at the Economic

Commission for Africa, noted that African Leaders have set a broad agenda on financing for

development, with a strategic vision to deliver on a financial architecture that would lead to inclusive

growth and structural transformation. She indicated that the African mineral and extractive sector

currently holds an impressive but untapped potential, which could be used to support the continent’s

development and mobilize domestic resources to kick start growth in underperforming sectors such as

agriculture, public health and energy. She noted that Africa’s growth of 2.4 percent of the global

production share would provide long time assets that would give future generations financial security

and economic resilience, and would reduce poverty, unemployment and the marginalization of

African peoples. She recommended that the mining sector should adopt regulations and the highest

environmental health standards that would lead to environmental sustainability as envisioned in

sustainable development goals.

the Keynote speaker, Sir Paul Collier, Professor of Economics and Public Policy at the

Blavatnik School of Government, University of Oxford, reminded the audience that we have just

lived through the biggest commodity boom that the world has ever had and now it is over. And that

the fall in oil prices has closed that chapter. He recalled the previous commodity cycle in the mid

1970s and mid 1980s, which the Africans were dissatisfied with and saw it as a missed opportunity.

Professor Collier advised African policy makers to see what went better and what did not in the

second cycle. He noted that transparency and taxation have improved. He underscored the importance

of other issues, such as public open access to geological information. Development corridors are

powerful instruments, shared infrastructure is vital, and it must be open access and for all uses. Hence,

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lawyers are badly needed because the challenge lies within the legal structures. Natural resource

revenue is unsustainable, volatile, and can lead to physical depletion and obsolescence. Stewardship

of these revenues is absolutely important. To deal with this African countries need domestic

investment, and Africa must invest in investing. The final area which Sir Collier underlined that needs

further improvement is communication. A main component to a good communication strategy is

managing expectations, and when there are discoveries the wealth element is exaggerated for the

common citizen, even though often this wealth per capita is unsubstantial. Secondly, the

communication strategy should manage ownership issues. Disputes over ownership are literally lethal,

as we can now see in the case of South Sudan. The right time to settle ownership issues is is pre-

discovery of resources, as was done in Botswana. The final strategy is stewardship, to build a mandate

of saving and investing rather than consuming. Ordinary citizens think more in the long term than

governments. We must use the resources to build a better world for our children. Lastly, Sir Collier

concluded by remarking that after finishing the super cycle of commodities, it is important for Africa

to take stock and build partnerships.

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Session Two: African Social and Economic transformation through inclusive and sustainable

industrial development

Ambassador Charles T. Ntwaagae, Permanent Representative of Botswana to the United

Nations, moderated the morning thematic session on the topic, ‘African Social and Economic

transformation through inclusive and sustainable industrial development’. Mr. Paul Maseli, UNIDO

Director , presented the issue paper, produced by UNIDO, on how the private sector can contribute

towards harnessing the full potential of natural resource endowments and contributes to inclusive

economic growth in Africa.

Mr. Maseli firstly pointed out that Africa’s progress is notable in light of the fact that in 2013

five of the top ten fast growing economies were in Africa. Additionally, there have been notable

improvements in economic and political governance as well as increased spending. However, this

economic growth has not resulted in shared prosperity. The level of poverty remains high, as the

continent’s share of the global GDP was 1.6% in 2013. In fact, the level of industrialization declined

between 1990 and 2013, according to Mr. Maseli. He attributed the lack of growth to the export of

commodities, because when governments export raw-commodities they also export jobs and tie their

economies to factors that they cannot control, which impacts the sustainability and inclusiveness of

growth. Additionally, Mr. Maseli reminded the audience that no country in the world has ever

developed without industrialization and stressed that Africa faces opportunities and challenges in this

respect, opportunities include the potential for Foreign Direct Investment (FDI) which is going to

African resource-rich and resource-poor countries. Furthermore, the rising labour costs in Asia

present an opportunity which may shift jobs to Africa instead. The challenges nevertheless are

considerable including: infrastructure deficit, weak institutions, investment climate, and effects of

climate change. Lastly, Mr. Maseli elaborated on the ‘how’ of industrialization and highlighted a few

factors that play a central role: the strong role of the state as well as sectors with a lot of potential such

as agriculture and the food and beverages sector. Mr. Maseli underlined in closing that there is no

one-size-fits-all solution. Different industrialization paths are possible and each country will need to

select its policies and strategies based on its specific socio-economic circumstances. In order to do so,

it will need to focus on all sectors, such as trade, logistics, infrastructure and technology, but if Africa

does not take advantage now, the opportunity may be lost.

Mr. John W. McArthur, Senior Fellow at the Global Economy and Development

Programme, Brookings Institution addressed the importance of the extractive industry from a

different angle, namely how it should support the agricultural sector, because the low productivity of

the agricultural sector is one of Africa’s biggest problems. The extractive industry only amounts to a

very small amount of the workforce, and only for half of the African countries (approximately 22)

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does the extractive sector make up for 10% or more of the economy. Mr. McArthur explained that

there are two basic problems with the agricultural sector in Africa. The first is access to infrastructure

(transport and energy) and the second is access to fertilizers, because Africa has the most costly and

most distant access to fertilizers. Some mineral deposits could be leveraged for fertilizer in Africa, but

the issue is that it is still very difficult and costly to transport these minerals. Regarding the

sustainable development goals, this means that three points have specific priority according to Mr.

McArthur:

1. How to maximize the infrastructure returns on agriculture?

2. How to deal with royalties and the financial sector?

3. And the issue of sustainable development accounting principles.

Ms. Maureen Jangulo Dlamini, Chief Executive Officer of the Zambia Chamber of Mines

viewed the session’s question from the perspective of the private sector. She noted that mining is one

of the largest drivers of growth in of Sub-Saharan economies, including Zambia, as mining

contributes an excess of 25% to government revenue. This means the private mining sector holds

great potential for economic growth, but countries like Zambia need to focus more on revenue

management rather than revenue collection. This is key when we are talking about inclusive economic

growth, which allows people to contribute to and benefit from economic growth. This is a big

challenge for Africa as the growth rates are good, but the effects have not trickled down to ordinary

citizens. In order to ensure that the private sector contributes to inclusive economic growth, Ms.

Dlamini presented the Action Plan for Accelerated Industrial Development for Africa (AIDA) Model,

which dedicates several clusters amongst others to promoting infrastructure, innovation, industrial and

technical skills. Lastly, Ms. Dlamini drew particular attention to the cluster which focusses on respect

for the environment, communities and people more broadly, as the mining sector needs to bring the

communities in which they work along in the development process.

Dr. Elias Ayuk, Director of the United Nations University Institute for Natural Resources in

Africa (UNU-INRA) placed the requirements for Africa’s industrialization in the context of the post-

2015 development agenda. His first observation was that the Sustainable Development Goals, which

are currently being deliberated upon by member states, are more technology centric than the

Millennium Development Goals were. Both SDG 8 and SDG 9 have key elements that underline the

importance of technology transfer, which provides for great opportunities for Africa. In order for this

technology transfer to occur, economic diversification should be made the backbone of the

industrialization process with special attention to commodity-based industrialization. Accordingly,

this requires investment in R&D. He underlined that the the implementation should: enhance cross-

sectoral linkages and partnerships; have the right infrastructure and policy space to access frontier

technology; and draw from the experience of successful countries to develop policies and

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programmes. Dr. Ayuk concluded with the framework of six I’s which he developed. In this

framework, ideas plus incentives, with innovation, infrastructure and institutions can be implemented

well to achieve improved growth and sustained wellbeing.

Discussion

The interactive question and answer session which followed, delved into a few more issues in

detail, such as the link between energy and industrialization, the role of urbanization vis-à-vis the

extractive industry and the role of protection against unfair competition to promote industrialization.

The speakers responded to each question and comment. On energy and industrialization, the speakers

agreed that the technology is available but that Africa is not investing enough. Ms. Dlamini also

underlined that we should look for more alternative sources of energy and promote partnerships to

help funding the high upfront costs of energy projects. Mr. Maseli made an appeal for more action and

less theoretical analysis as a lot of learning comes by doing. On urbanization, Mr. McArthur stated

that most have an urban bias whereas Africa is mostly rural which means that it either needs a more

productive agricultural sector or more well-paying jobs for the growing African population.

In particular, Mr. Eloho Otobo raised the issue of appropriate technology to facilitate effective

natural resource value addition. He added that it was critical that natural resource governance was

made central to any mechanism to efficiently transform the continent through industrialization.

Moreover, Mr. Otobo highlighted the importance of inventions, innovation and imitations as a conduit

through which Africa could add value to its commodities, but stressed that this would not happen

without adequate investments in science and technology.

In response, Dr. Mayaki stated that investment in science and technology is indeed very important

for industrialization in Africa. He cautioned however that it was important to adapt home grown

technology to Africa’s own needs. Towards this end, Dr. Mayaki stressed the importance of South-

South Cooperation as a facilitator of technology transfer. Dr. Mayaki stated that though technology

was important, we should not wait for technology advancements to move forward with our

industrialization process.

The Permanent Representative of Tanzania, H.E. Mr. Tuvako Nathaniel Manongi, noted that,

among others, the main challenge facing Africa’s industrialization was access to adequate

infrastructure, and in particular energy sources to power the industrial revolution. On Agriculture, he

raised the important issue of access to fertilizers and raised the question about what legal frameworks

where currently in place to facilitate and maximize the potential of natural resource value addition.

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In response, Dr. Ayuk stated that access to energy was indeed crucial for industrialization. He

stated that it was important to revisit the gap in infrastructure in the African continent. Dr. Ayuk noted

that one possible solution to providing energy was through the renewal of waste products to produce

energy. Regarding access to technology, he informed the meeting that the technology was already out

there. All Africa had to do was leap frog using already available technologies. Dr. Ayuk added that

the role of Small and Medium Enterprises (SMEs) was critical in this regard.

Ms. Maureen Dlamini, also responding to the need for energy to facilitate the industrialization

process, stated that efforts should be made to look at alternate sources of energy in Africa. She

stressed that alternate funding mechanisms were also crucial to funding industrialization projects and

that it was important to be creative in getting financial institutions to fund industrialization projects in

the African continent.

The Representative of The People’s Republic of China took the opportunity to raise China’s

support for Africa, including within the framework of the Forum on China Africa Cooperation

(FOCAC), and during the current negotiations on the Post-2015 Development Agenda and stated that

China supported the priorities of Africa, as encapsulated in the Common African Position (CAP) for

the Post-2015 Development Agenda. He further stated that an enabling environment was critical to

allow for Africa’s economic growth and called for the international community to honor its pledges

and commitments made towards Africa, particularly on FDI, ODA and trade related issues. He also

called for the strengthening of partnerships with Africa through South-South and triangular

cooperation. Moreover, he called for the international community to afford Africa the adequate policy

space for development and stressed that African ownership of its development priorities should be

respected, and in this regard, he commended the African continent for adopting Agenda 2063, through

which its partners should support Africa.

The Representative of the People’s Republic of China stated that China-Africa relations

recognized that industrialization was the way to transform the African economy, and would continue

to support Africa through win-win cooperation, culminating in increased trade with the African

continent to the tune of some $180 billion, an increase of 4.5 per cent since 2013. Finally, he further

stated that China, through its foreign policy would continue to show its solidarity with the African

continent as it endeavored to transform its economies through industrialization and natural resource

value addition (beneficiation).

The Representative of UN-HABITAT stated that Africa was the least urbanized region in the

world, but was now urbanizing at the fasted rate in the world. She added that rapid urbanization

implied that the urban settlements will progressively absorb the population growth in Africa. She

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noted that the African continent would therefore witness an increase in population concentration in

urban areas, as opposed to the wide dispersion pattern that was prevalent in the past. Consequently,

she noted that it was very important for development policy to carefully weigh changes in population

distribution and their policy implications for both urban and rural development. She also emphasised

that much emphasis should focus more on strengthening the institutional capabilities needed to meet

the challenges of rapid urban growth in Africa.

In response, Mr. McArtur stated that Africa was indeed urbanizing at the fastest rate in the world.

He stated that the greatest challenge for Africa was how to raise the productive capacity of the African

citizenry, whether in rural or urban areas. Mr. McArtur stated that Agriculture was very important to

the livelihoods of the many who live in rural areas, hence the importance of having access to

fertilizers to ensure that rural farmers got more produce from their farms, and therefore were deterred

from moving to urban areas in search of jobs. He also raised the issue of improved technology for

fertilizers and seeds to increase productivity of farms. Mr. McArtur stated that every effort should be

made to ensure that every incentive was given to increasing agricultural productivity, the mainstay of

peoples’ livelihoods in Africa, before focussing on industrialization. He noted that there was a

sequence to development, and that sequence entailed Agricultural transformation followed by

industrial transformation.

Dr. Eric Kashambuzi called for reconsidering the traditional notion of comparative advantage in

which African countries depend on natural resources exports. He highlighted the importance of

protecting infant industries in Africa to ensure that they succeed. He observed that undue competition

from multinationals should be carefully monitored to help preserve the viability of infant industries in

Africa. Dr. Kashambuzi noted that developed nations did not face the same type of competition that

African industries were now facing, and therefore cautioned that all necessary measures should be put

in place to protect these industries, while also gradually helping them to become more globally

competitive.

In response, Dr. Ayuk stated that while it was important to protect infant industries, all efforts

should also be made to ensure that there was good leadership in place to guide the industrialization

process. He cautioned that too much protective measures could become a burden as the infant

industries could become inefficient and fail to compete globally. Dr. Ayuk reiterated that it was no

longer to Africa’s comparative advantage to export raw commodity materials. It was now time to start

processing and adding value to our raw materials. He gave the example of Cocoa from Ghana which

is processed in Switzerland to Chocolate and re-imported back to Africa.

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Dr. Mayaki picked up on the issue of why Africa was not industrializing at a faster pace as

alluded to by Dr. Ayuk. Dr. Mayaki stated that it was time to shift from analysis to implementation.

He raised the issue of the AIDA which had gone through a rigorous analytical process, and now had a

plan of action which was still lagging behind in implementation. Dr. Mayaki stated that some African

countries where however getting it right, for example, Ethiopia and Mauritius, which had shown over

time their political will to move on from Memorandum of Understandings (MOUs) to Memorandum

of Doings (MODOs).

The Representative of Kazakhstan stated that his Government supported the Common African

Position on the Post-2015 Development Agenda, and would support Africa’s priorities during the

current negotiations on the Post-2015 Development Agenda. He informed the meeting that the Second

West Africa Oil and Gas Security 2015 Summit would be held on 10-11 June 2015 in Lagos, Nigeria

to further discuss exciting investment opportunities on natural resources in Africa.

Dr. Delois Blakely (Queen Mother) thanked OSAA for organizing the meeting and stated that it

was important that while we discussed issues of natural resource extraction, we should remember that

Africa was not for sale. She stressed the need to reflect on the rights we had as a continent, and

alluded to the over 55 million Africans in the Diaspora, who should also be mobilized to help support

Africa in its industrialization process.

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Session Three: Implementing the African Mining Vision in the context of Africa’s development

aspirations: between challenges and opportunities

The third session was devoted to the implementation of the African Mining Vision (AMV) was

moderated by Her Excellency, Ms. Marjon Kamara, Permanent Representative of Liberia to the

United Nations.

Mr. Busia, Senior Mineral Sector Governance Advisor at the Economic Commission for

Africa presented the issues paper on “Main achievements in the implementation of the Africa Mining

Vision and what critical lessons can be applied to other extractive sectors in Africa?” Mr. Busia

stated that creating awareness around the Africa Mining Vision is one of the more challenging but

important components. The AMV’s goal is to create a “transparent, equitable and optimal exploitation

of mineral resources to underpin broad-based sustainable growth and socio-economic development”.

This requires a number of policy shifts at the African governments level, such as for example

“adopting innovative fiscal sector and taxation regimes” and “supporting regional integration and

cooperation”. He noted that UNECA, AUC, AfDB and UNDP are the implementing partners for the

AMV through the African Minerals Development Centre (AMDC) and that the focus of the AMDC is

quite broad, and includes: tracking and coordinating the implementation of AMV; identifying gaps

and areas of need and providing expertise to address those gaps; policy research and strategies; think

tank capacity and implementing continues advocacy. He explained that the Country Mining Visions

(CMV) promoted through the AMDC are both a process and a product, and really emphasize the need

for a long term perspective. The process takes place through stakeholders’ engagement and defines a

road map for all sectorial ministries while the product is the social contract it provides for promoting

economic transformation, inclusive growth and mineral resources based industrialisation.

Mr. Busia discussed the experiences in a number of countries with the implementation of the AMV,

including Mozambique, Lesotho, and Tanzania while many countries are due to receive support for

their upcoming CMV processes and reform activities. Mr. Busia concluded by highlighting some of

the main challenges for AMV domestication and CMV:

1. Poor knowledge of and familiarity with AMV among African governments;

2. Lack of strong political will and commitment;

3. Concrete risk of diversion of energies/attention of African governments and citizens from

pursuing AMV – there are different competing frameworks in place;

4. Efficient administration and sound national governance framework and practices;

5. How to combine a broad range of stakeholders with legitimacy and capability to take

decisions, enforce them and support them over a period of time (beyond political cycles);

6. Which frameworks and analytical tools can be used to identify the economic and social

impacts of extractives industries.

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Ms. Sheila Khama, Director of the African Natural Resources Centre of the African

Development Bank, discussed in her response to Mr. Busia’s presentation that Africa is not the only

continent which has large natural resource wealth and therefore competes heavily for Foreign Direct

Investment (FDI). The other element that she stressed is that it is currently only an aspiration that

governments distribute the wealth from the extractive sector as this requires a lot of capacity, and on

top of that the extractive sector is the most corrupt. The driver for corruption is surprisingly not at the

concession but at the implementation stage, when layers of people are involved in for example

procurement. So, the bottom of the population is not getting any better, and hence Ms. Khama

focussed on the partnerships which are needed to implement the AMV. The mining sector is diverse,

depending on the forty different mineral types that exist. This requires significant knowledge and

tools from institutions inside and outside of Africa. In order to avoid duplication and play a

complementary role, the African Development Bank tries to focus on practical tools, which delivers

extensive knowledge in a more pragmatic fashion.

Ms. Khama underlined how important it is for governments to engage civil society, domestic as

well as civil society from abroad. She explained that civil society is seen as the most trusted segment

of society by most of the population and hence governments need them to reach people. This is

something that the African Development Bank is already trying to establish, and focuses on public

participation because people have confidence in civil society. In addition, the bank contributes to

AMV through long term resource planning and governance and regulatory effectiveness. Ms. Khama

concluded with a couple of questions addressing the tension between governments and investors,

which is a relationship that should be addressed and the question of what we should capacitate

African governments in to arrive at some priorities. Not all the skills need to be acquired by the civil

service, as many others can be outsourced.

Mr. Mugyenyi, Focal Point for the African Mining Vi sion and Senior Industry Adviser to

the Commissioner for Trade and Industry, African Union Commission outlined the linkages

between Agenda 2063, the Common African Position (CAP) on the post-2015 development agenda

and the African Mining Vision (AMV). The mineral sector will play a transformative role which will

bring both agendas together while being informed by the AMV. The Structural Transformation which

Africa wants to achieve means that countries move from factor-driven economies to technology,

efficiency and eventually innovation driven economies. Upstream beneficiation means that domestic

producers and companies need to link to the regional/global mineral chain. The downstream

beneficiation is what takes place somewhere else in the world. Sidestream linkages are the sectors that

support industrialisation, such as communication, financial services and others. What we are missing

in Africa are the requirements for upstream beneficiation (industry operations, technical transition etc)

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and downstream beneficiation (skilled jobs, taxes, innovation etc). The challenges of implementing

the AMV from the African Union Commission perspective can be boiled down to 4 points:

1. The role of the state – what is the role of the state? African states need to reorient themselves,

as some of their mining policies are over 50 years old and many of these policies, across

sectors (agriculture, trade etc) are not speaking to each other. The legal and regulatory

framework needs to be fit for purpose and robust.

2. The role of institutions – what do institutions do to implement AMV? Are the institutions

integrated and working together holistically? Therefore the African Union has been tasked to

take stock of all the centres of excellence that exist to work on the AMV.

3. The role of the private sector. Africa needs to be competitive and the link between domestic

and international policies needs to be strengthened. Even at the local level, companies need to

be competitive to feed into the mineral sector. How are we addressing the small and artisanal

mining companies? There is a new reformed women and mining association to understand

how women are contributing to the mining sector.

4. The role of the implementing partners. This one is more critical than the other three points.

We are all working in silos, through the Regional Coordination Mechanism and the different

UN agencies who should work as one UN at the national level. Our implementation at the

national and regional levels is not results oriented.

Mr. Malango, CEO of the Namibian Chamber of Mines focussed his presentation on the

value addition process in Namibia and underscored that the mining industry is a driver for other

linkages, with other sectors. Many countries focus on policy interventions that aim to deliver value

addition, but some of these are not so effective. The Namibian Chamber of Mines established a Joint

Value addition Committee to evaluate what should happen to our minerals when they leave the mine.

On the challenges and opportunities that have been identified through this process, Mr. Malango

stressed that there is no common understanding of stages of value addition, as well as there are

different interpretations of who should do what. The definition that Mr. Malango proposes is

“Processing of minerals from mined ore to end consumer products”. Value addition takes place in two

main stages – between mining and refinery – and then beyond for manufacturing and beneficiation. At

the latter stage (for beneficiation and manufacturing) comparative advantages are not needed. Another

challenge is created by a lack of economies of scale. Some commodities are very unique, for example

gold mines never run a refinery as the economies of scale are not feasible. Years ago gold would be

refined in Switzerland and now South African mining companies have invested in refinery facilities in

South Africa so that jobs are at least kept in Africa. A similar story applies to uranium as a country

like Namibia only mines uranium but is not engaged in any of the enrichment or other value addition

processes. The lessons for the African Mining Vision are hence to:

a) Standardize the definition of value addition;

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b) Adopt standard principles to unique minerals such as gold;

c) Identify constrains and address them;

d) Create intra-regional markets for mineral based finished goods;

e) Namibian road map of value addition should be emulated and Africa needs country specific

value addition strategies.

Professor Ndikumana at the University of Massachusetts-Amherst discussed the role of the

private sector to contribute to inclusive economic growth in Africa. Mr. Ndikumana walked the

audience through a number of important issues, focussing on “How can the private sector (domestic

and FDI) contribute towards harnessing the full potential of natural resource endowments and

contribute to inclusive economic growth in Africa”. First of all he urged policy makers to take a broad

perspective, a comprehensive strategy for engaging the private sector to maximise the value addition

of mineral resources. The mineral resource sector is basically de-linked with the financial sector as

mineral companies barely are listed in the stock market. Professor Ndikumana posed the question

whether we can invest our wealth domestically through the financial system which would increase the

overall contribution of the mineral sector to the economy. Secondly, he stated that we need to take a

long term perspective when we are trying to understand how much the economy gains from mineral

resources. The mineral sector is not harnessed enough, which would increase the share of mineral

resources to GDP, but also indirect contributions should count. He also noted that we need to think

about revenue redistribution – many conflicts arise from minerals and mining communities rarely see

benefit from mineral resources because this wealth is never redistributed. So, this redistribution

formula should be negotiated between the central government, local government and the community.

The public needs to see the benefits from the resources. We also need to think regional – for example

through regional mining marketing and processing hubs. There is a bias towards large formal mining,

whereas small scale mining is very important and a lot of value and employment is created there. The

problem is that the jobs tend to be temporary and how do you regulate and gain revenue from small

scale mining? Nevertheless, small can be beautiful and we need to invest more in research to

understand the true value of small scale mining. The main policy levers which Professor Ndikumana

presented for incentivising the private sector to contribute to natural resource development as part of

inclusive growth included:

- Long planning horizons;

- We need to use the taxation system to attract investment, both foreign and domestic investors.

Tax incentives tend to be biased to FDI instead of domestic investors, which should be

rectified;

- Privatisation has played a role in mobilising investment, but we need to think about how we

privatise diligently so we create a more level playing field where domestic investors can also

contribute;

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- We need to mainstream employment, which can be driven by well-crafted policies. Labour

should not be brought in from abroad by mining companies where Africans can do the same

jobs;

- Curbing tax evasion, especially by mining companies, and mining sector-related illicit

financial flows.

In his conclusion Professor Ndikumana claimed that for Africa to be successful we need a paradigm

shift and we need to go beyond comparative advantage as a static concept and think about

comparative advantage in a dynamic fashion which means that African economies can build capacity

to become competitive. This also applies to how we can maximise national and regional policies to

incentivise the right type of investments. Lastly, Professor Ndikumana underlined that policy space

and ownership in a global context is still created in spaces in which Africa is not represented, which

should change. It is only at the level of global governance that we can address corruption.

Discussion

The interactive question and answer session addressed the role of Corporate Social

Responsibility (CSR) of mining companies as Sir Collier questioned what companies could best do as

part of CSR as some are now building capacity in local government (for the construction of schools

for example) whereas others are partnering with supply companies to bring these local firms up to

global standards. He stated that it was important to help African Governments build local capacities to

facilitate the industrialization process. Sir Paul Collier also alluded to Malaysia, as a case study,

which had succeeded in diversifying its economy from a natural resource based economy to a

technology hub, as evidenced in Penang Science Cluster. He cautioned against putting all eggs in one

basket by way of only focusing on mineral beneficiation.

In response, Mr. Malango stated that indeed local supply chains were critical in the

industrialization process as this would allow for transfer of technology and skills to local communities

and create the necessary sideward linkages with other sectors of the economy, including by providing

jobs for the local communities. He added that African governments had started to look more seriously

into corporate social responsibility; however CSR were still mostly unregulated. Mr. Malango added

that more efforts were needed however to more effectively engage with the private sector. He stated

that in his country, the progress in legislating CSR and supply chains was slow, but the process was

moving in the right direction.

Mr. Malango also informed the meeting that Namibia was now in the process of rolling out a

Mining Charter that would help protect the mining industry, while also ensuring that the extractive

mineral industry did not only benefit and empower the rich, but was instead streamlined through

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various backward and forward linkages with other sectors of the economy to allow for beneficiation

and help reduce poverty through job creation. He added that one pillar of the Charter would include a

section on empowering communities by ensuring that mining companies paid a bare minimum to

social safety nets and environmental protection. To conclude, Mr. Malango stated that Namibia was

also building a Mining Procurement Database to keep track of its supply inventory in the mineral

sector. He added that this would help open up the mining industry to the local communities as they

would purchase mining inputs from local firms.

On the issue of CSR, Mr. Frank Mugyenyi stated that the issue of taxation of multinationals

was critical to help offset some of the negative impacts of the mining industries in the environments in

which they operate. He commended Namibia for their proactive mining policies, in particular their

efforts to design a Mining Charter and a Mining Procurement Database. Mr. Frank Mugyenyi stated

that such practices could be replicated continental-wide as good practices.

Ms. Fatima Denton alluded to the remarks made by Ms. Khama on the role of CSOs in the

industrialization process. In particular, she sought for more clarity on the issue that Governments that

were unable to engage effectively with CSOs lacked good stewardship and governance practices in

managing the industrialization process. Ms. Denton noted that collaborating with CSOs led to a

positive ripple effect as it fostered accountability, transparency and implementation. She asked,

however on how to expand the horizon and engagement with CSOs so that they could be better

partners in the implementation process, together with the private sector. Adding to her comments, the

Permanent Representative of Liberia, Ambassador Kamara asked how to ensure that Governments

trusted the CSO’s first, as this normally was the stumbling block in fostering effective partnerships

with Governments..

In response, Professor Leonce Ndikumana stated that there was a need for a strong inclusive

industrialization strategy that clearly articulated the role of the Government, the role of the private

sector, the role of CSOs, and the role of Public –Private Partnerships. He added that the role of the

CSOs would help ensure accountability by Governments in the implementation process and help

eliminate corrupt practices. Professor Leonce Ndikumana stated that the strategy should also outline

how the revenues from the extractive sector could be used to finance the building of infrastructure to

facilitate the industrialization process. Finally Professor Leonce Ndikumana stressed the importance

of building capacity in the extractive sector with the necessary skills to manage the local industries.

In response to the point made by Mr. Frank Mugyenyi that the Regional Coordination

Mechanism (RCM) was not working effectively, and that the AU and its partners continued to work in

silos, Mr. Abdelaziz stated that the UNs support for the African Union largely depended on the

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priorities of the African Union and their programmes to implement their priorities. He added that the

UN was very sensitive to the issue of ownership and hence the best way to get the UN’s support was

through United Nations General Assembly resolutions. Mr. Abdelaziz stated that the UN supported as

the NEPAD initiative through General Assembly resolution57/7 and 57/300, which led to the creation

of OSAA as the focal point and Secretariat for coordination and advocacy of the NEPAD programme

at the UN Headquarters. He noted, however that the RCM process was signed in 2006 by the then

heads of the AU and the UN, without going through any formal process to institutionalize the

partnership. As a result, he noted that there was no financial backing to support the implementation of

the AU programmes, as encapsulated in the Ten Year Capacity Building Programme, with the RCM

being its Secretariat. Mr. Abdelaziz advised the African Union to partner with the United Nations,

through the African Group of Ambassador here in New York, particularly with the recent adoption of

Agenda 2063. He concluded that OSAA would then work with the African Group as it sought to

adopt the relevant General Assembly resolutions for UN support for the implementation and

monitoring of the African Union Agenda 2063.

In response, Mr. Frank Mugyenyi stated that in the AU’s previous engagements with the UN-

ECA, in particular, with Mr. Antonio Pedro, issues of effective collaboration between the AU and the

UN had emerged. He noted, however, that progress had since been made with the AU’s interactions

with the ECA Office in Addis Ababa, through his engagements with Mr. Kojo Busia. He called for

the UN to work as one at the sub-regional and continental levels, and to effectively coordinate its

support to the AU through the RECs.

Dr. Mayaki commented that extractive industries in Africa were originally embedded within

extractive institutions in colonial times for export out of the continent. As a result, he noted that the

mining and extractive industries still lacked the full integration into the local economies of the African

countries. He stressed that this required strong leadership to link the mining sector to other sectors of

the economy, including in agriculture and education. Dr. Mayaki also raised the issue that some of the

public policies put in place in the mining sector were not rational and only served special interests. He

advised that public policies should be well thought out and should serve the interest of the countries,

particularly to reduce poverty through inclusive development policies, and not solely to enrich the

elite of the societies. Dr. Mayaki stated that the question we should be asking is how to ensure that the

public policies enacted were useful to the public good, that is, to the welfare of the people. This

pointed to political will, good leadership and stewardship and the political power structure and

relationships between the Governments and their citizenry.

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Session 4: Closing:

In his closing remarks, Mr. Abdelaziz thanked all relevant parties, the ambassadors of Botswana

and Liberia who moderated the two interactive sessions, the co-organisers, the panellists who shared

their views as well as the audience who asked questions and made comments. The USG stated that

this session will be followed with others while OSAA will continue to cooperate with the African

Union, the African Development Bank, the Economic Commission for Africa, the private sector, civil

society and other parties to support Agenda 2063. Materials will be made available on the OSAA

website and the co-organisers will produce a summary report with key recommendations.

Commissioner Acyl also concluded that the sessions were successful. Her closing remarks

underlined that industrial development is a must for Africa, not a luxury. No country in the world

industrialised because of aid and hence Africa needs its own resources to transform its economies.

Mineral wealth, if properly used and managed can contribute to broad-based development. Transport,

energy and water infrastructure are also critical to develop the mineral potential and leapfrog new

technology to protect the environment at the same time. The promotion and use of local content and

beneficiation should be done through innovative measures. One of the pre-conditions of managing

mineral resources is that when they are badly managed they can lead to conflict, as Mr. Djinnit aptly

presented. Science and technology are the bedrock for developing a constructive industry to arrive at

economies of scales. Geological mapping is also a requirement for this development to know about

the extent of our resources. Agenda 2063 is the basis for implementation. As the way forward the

Commissioner called for more effort so the mineral sector provides more sidestream linkages to

energy and infrastructure sectors and she said that more needs to be done to popularise the AMV, in

which OSAA could play a role. Lastly, she concluded that a percentage of ODA should go to

productive capacities, because most of it is directed somewhere else and if African countries do not

insist on this, it will be very difficult for Africa to transform our economy and create jobs.

in his closing remarks, Mr. Maseli, underlineed that Africa should address the issue of productive

capacity; the ability of different African countries to manage their systems (management,

communication, follow-up etc). Looking towards the future, Mr. Maseli recognised that the post-2015

agenda reflects several issues which are of great importance to Africa, but if one looks at the UN

system today, only few deal with economic development issues. Hence, Mr. Maseli advised African

Ambassadors to pay attention to this and strengthen the UN system to deal more with economic

development issues.

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III – Preliminary Recommendations

First: Salient points of the discussions:

� Improved transparency and accountability were identified as core prerequisites to enable

extractive industries to contribute to sustainable development. Promoting accountability at all

levels and among all actors engaged in natural resources exploitation, besides managing

ownership issues, are critical factors for enhancing the management of the extractive

industries.

� The crucial role of manufacturing and enhancing the productive capacities of African

economies as drivers for job creation, sustainable livelihoods, food security and equitable

growth, which are key requirements for eradicating extreme poverty in Africa by 2025 as well

as meeting the associated inclusive sustainable development goals in the long-run. The full

participation of women and youth should be an integral part of these efforts. National policy

dialogues on the extractive industry should include women and youth in their consultations as

well as in the decision making processes.

� The need to implement the recommendations of the Seventh Joint AU Conference of

Ministers of Economy and Finance and ECA Conference of African Ministers of Finance,

Planning and Economic Development, held in Abuja, Nigeria in March 2014 which stressed

the need for adopting credible industrial policies as well as the establishment of appropriate

mechanisms for resource mobilization and effective industrial policy organizations to enhance

the structural transformation of the continent. In this regard, the findings of the 2013 and 2014

Economic Report on Africa by the ECA and the AUC should be dully taken into

consideration.

� Long-term financing and capacity building for the implementation of the African Mining

Vision (AMV) and the Plan of Action for the Accelerated Industrial Development of Africa

(AIDA) is essential. The establishment of the Africa Minerals Development Centre, as a

Specialized Agency of the African Union as agreed by the 23rd AU Summit will certainly

assist in highlighting the importance of the AMV and AIDA.

� Enhanced cooperation and coordination between the African Union Commission, the NEPAD

Agency, Regional Economic Communities, and United Nations system, in particular

specialized agencies such as UNIDO, is of crucial importance to ensure synergy and

harmonization of national, regional and global programmes in the implementation of the

African Mining Vision within the framework of Agenda 2063 and the post-2015 development

agenda.

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� Commodity-based industrialisation can be a strong basis for intensified intra-Africa regional

trade and support international efforts in climate change, as called for by Agenda 2063.

Sustainable industrialization and the use of modern and clean technology are prerequisites.

Technology transfer and capacity building remain key to economic growth and sustained

industrialisation in Africa.

� The nexus between peace, security and development was stressed. Efficient management of

natural resources will lead to economic and social inclusion, thus will lead to supporting the

objective of the African Union to silencing the guns by 2020;

� The profound negative socio-economic impact of illicit financial flows needs to be addressed.

African countries and their development partners, with the support of the AU and the

international community should continue to take measures towards curbing illicit financial

flows from Africa, including measures to address tax evasion. The Mbeki Report adopted by

the 24th AU Summit contains recommendations that could provide the basis for addressing

this issue.

� Private investment, both domestic and foreign direct Investment, can contribute immensely to

inclusive economic growth in Africa. Multinational companies should be encouraged to

increase their investment in local processing; link Africa into global value chains, and align

their business activities with national sustainable development laws and priorities, including

the AMV goals and objectives. Companies could also boost mining revenue/taxation receipts

while plugging financial leakages in the extractive industry in Africa. Corporate social

responsibility should be promoted as part of the broader commitment by all stakeholders to

local communities’ development and empowerment.

� The need to protect the African ecosystem, reduce environmental effects, land degradation,

deforestation and desertification, which are often associated with extractive industries was

stressed. This will require investments, including from mining corporations, as well as

technology transfer and human capital development to enhance Africa’s industrial

productivity and competitiveness;

� Investment, domestic and foreign, including by sovereign wealth funds, in education, training,

technology and innovation, and infrastructure development are critical enablers to address

many of the main bottlenecks that constrain Africa’s access to global value chains and ensure

a sustained and inclusive economic growth that is translated into meaningful reduction in

poverty levels. These investments, public and private, are crucial for expanding Africa’s

manufacturing base, building productive capacity, and improving the share of the continent in

international trade and world manufacturing value added.

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� The role of Africa’s development partners in providing technology transfer, capacity building

and finance as well as improved market access is essential to support enhancing the

productive capacity of the African economies and promote structural economic

transformation, including through industrialization and value addition.

� A paradigm shift in managing natural resources endowments is needed, including with regard

to going beyond the traditional notion that the comparative advantage of Africa lies in its

exported natural resources. African countries should reduce their reliance on natural resources

exports and adopt new and innovative approaches for beneficiation, through industrialization

and value addition.

� The importance of enhancing cooperation, coordination and partnership between the United

Nations system and the African Union, and encouraging the Office of the Special Adviser on

Africa (OSAA), The African Union Commission (AU), the United Nations Economic

Commission for Africa (UNECA), the United National Industrial Development Organization

(UNIDO), and the African Development Bank, to support the implementation of the

following concrete recommendations of the EGM.

Second: Preliminary Recommendations

Based on the above, the EGM has put forward the following concrete recommendations for

consideration by African countries; the African Union, NEPAD and regional economic

communities (RECs); development partners; and the United Nations system:

A) African Governments should:

1) Conduct geological mapping of natural resources and develop national strategies for the implementation of the Africa Mining Vision, including the development and implementation of country mining vision that incentivizes value addition and industrialization.

2) Increase their investment in support of education and training as well as to support small scale mining and small and medium enterprises.

3) Develop policies and legislations that promote transparency and accountability in the exploitation of extractive industries and address illicit financial flows.

4) Promote public-private partnerships and corporate social responsibility.

5) Create an enabling environment to attract domestic and international investment, including sovereign wealth funds, to build productive capacities and promote value addition and industrialization.

6) Mobilize support and advocate for building resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.

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7) Implement appropriate policies and measures, including in the area of tax reform to curb illicit financial flows, including by addressing tax avoidance.

B) Within their specific mandates, the African Union, NEPAD and regional economic communities (RECs) should:

8) Provide support, including technical support, for African Governments in the formulation of national strategies to enhance the productive capacity of the African economies.

9) Promote intra-African trade to achieve economies of scale and the establishment of regional marketing and processing hubs. African regional and sub-regional organizations should continue to advance Africa’s integration agenda to reach the goal of the Continental Free Trade Area.

10) Prioritize value addition and industrialization, infrastructure development and access to energy in the first 10-year Action Plan of the AU Agenda 2063.

11) Mobilize resources for the Implementation of the NEPAD sectoral frameworks and projects as well as the Dakar Agenda for Action (DAA) to finance infrastructure development projects given the importance of infrastructure development for enhancing the structural transformation of the African economies.

C) Africa’s development partners should:

12) Support the development of downstream and upstream linkages from the extractive industries sectors.

13) Facilitate technology transfer to ensure sustainable exploitation of Africa’s natural resources and mitigate environmental effects.

14) Provide finance and capacity building to support the implementation of the Africa Mining Vision, including through building institutional capacities at the national, regional and sub-regional levels.

15) Provide increased aid for trade and improved market access for African exports, particularly manufactured goods.

16) Improve access to credit, on concessionary terms, to enhance the efforts of African countries to support small-scale mining, small and medium enterprises, infrastructure development, access to energy, value addition and industrialization.

17) Scale-up official development assistance (ODA) to support education, training and capacity building and allocate a specific percentage of ODA to support building the productive capacities of the African economies.

18) Support the efforts of African countries to curb illicit financial flows, including by addressing tax avoidance by multinational companies (MNCs).

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19) Advance the reform of the global economic governance by ensuring the full participation of African countries in the global economic decision making and norm setting.

D) The entities of United Nations system, within their respective mandates, should:

20) Support building the capacities of the African countries in the area of sustainable industrial development.

21) Strengthening the African capacities at the national, regional and sub-regional level in the areas of industrialization and value addition, including in the work of the inter-departmental Task Force on African Affairs and the Regional Coordination Mechanism

22) Follow up on the fulfilment of commitments by development partners to support value addition and sustainable inclusive industrial development, include those related to ODA and aid for trade.