Mutambara proposed that parliament should have an oversight role to protect the interests of the country by ensuring transparency and the sincerity of investors through the engagement of technocrats before the deals are sealed and that such deals should come before parliament for debate and ratification before being entered into. Mutambara is spot on.
Investment contracts are critical in defining the terms of an investment project and constitute a key instrument of governance. They determine the distribution of risks, costs and benefits of the project. They shape the extent to which the investment provides public revenues and creates income-generating opportunities through employment with the local economy. Simply put, a contract determines the extent to which a country benefits from its mineral resources.
If well designed and implemented, contracts can maximize the contribution of natural resources investment to sustainable development goals to the benefit of the people of Zimbabwe.
However, poorly negotiated, drafted and executed contracts may impose unfavourable terms on the host country and communities often for a long period of time, sowing seeds of dispute and undermine the pursuit of sustainable development goals like poverty reduction and environmental sustainability.
Against this background, it is surprising that contract negotiation has remained the preserve of a few individuals, at times without the competency to craft good mining deals for the country. If the Zimplats and Zisco-Essar deals are anything to go by, then these negotiators are not in anyway helping the country to get maximum benefits from its diverse and significant mineral resource base. Mineral resources carry the expectations of the nation for economic recovery, stabilsation and growth and should therefore be carefully negotiated if these expectations are to become a reality. At the heart of the dispute between Zimplats and the government of Zimbabwe is a poorly negotiated contract.
It is instructive to note that despite the accusations and counter accusations between the government and Zimplats, the contract, which is at the centre of this dispute, remains a closely guarded secret. Why is this contact not being disclosed so that the nation knows the details of this allegedly skewed contract and make their own judgment? Recently, the Zisco-Essar deal was concluded.
However, even before the ink dried we were told that the country had just given away its strategic steel company and its super-rich iron mines virtually for nothing. As long as mining deals continue to be negotiated in secrecy, then the country must brace itself for more Zimplats and Zisco-Essar deals that do not meaningfully benefit the country. The same is true of diamond deals. Negotiating and sealing poor deals makes a mockery of Zimbabwe’s diverse and significant mineral resource base
The solution lies in ending this opaqueness that characterises the negotiation of mining deals. What is needed is transparency across the whole mining value chain from the award of licences, contracts, revenue generated by mining companies and revenue received by the government and the transparency use of revenue.
In negotiating mining deals, the government should consider drawing on expertise from other stakeholders who includes civil society organisations, scholars and communities and not just technocrats only. This expertise is at government’s disposal and it must not hesitate to utilise it for the benefit of the current and future generations.