Leave business to the private sector 

SHARE   |   Sunday, 30 November 2014   |   By Phillimon Mmeso
Mulenga Mulenga RICARDO KANONO

The creation of any nation’s wealth should be left to the private sector with government restricted to providing an enabling environment through sound policies, said Dr. Sixtus Mulenga, founder and executive chairman of Musamu Resources of Zambia.

Speaking during the annual democracy forum organised by Institute for Democracy and Electoral Assistance (IDEA) in Gaborone, Dr. Mulenga said once government starts state-owned companies, it is a recipe for disaster.

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Mulenga, a Zambian mining industry expert, gave an example of his country’s economy which relied on copper mining which was controlled by the state.

“Many experts expected Zambian copper to triple in a few years after it was discovered but the opposite happened because it was controlled by the state which used the revenue to fight political battles,” said Mulenga.

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Mulenga, who holds PhD Degree in Geology and DIC from the Royal School of Mines, said that since the mining sector was transferred to the private sector, production and revenue improved tremendously. Natural resources, which most African countries are endowed with and rely on them for economic prosperity, have proven to be a curse to some of them as they have failed to diversify from them, said Mulenga. 

He urged countries to encourage and nurture growth of local entrepreneurship in the mining industry so as to create a local base of industrialists that can own mines and work side by side with international mining companies.

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“They need to promote local manufacturing of inputs on the upstream side of the mining supply chain,” said Mulenga.

Parliamentary Specialist at Natural Resource Governance Institute, Femke Brouwer, said countries whose economies rely heavily on natural resources face a major governance deficit. Botswana was one of the countries that scored less at 47 out of 100 and ranked 30 out of 58 countries on resource governance index due to a "failing" score for reporting practices and "partial" scores for the other components.

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NRGI - which helps people to realise the benefits of their countries’ endowments of oil, gas and minerals - noted that in most cases, the poor, are not benefiting from the natural resources  found in their land.

“Ruling elites benefit from natural resources than local people,” said Brouwer.

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Brouwer said that their investigations at Natural Resources Governance Institute has shown that most governments whose economy is too reliant on natural resources used them to influence political system in a country.

Former Minister of Petroleum and Energy in Norway, Einar Steensnaes, said that good governance is needed in tapping on natural resources. The discussion was held under the sub theme: Democratising development through shared responsibility for sound natural resource management and was attended by different stakeholders around the world including members of the diplomatic corps.

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