The Portfolio Committee on Budget, Finance and Economic Development is conducting national consultations for the 2021 budget which are running from the 12th to the 16th of October 2020. This comes at a time when the PWYP Zimbabwe coalition is running a campaign to enhance community benefit sharing from mining revenue. Transparency and accountability are key tenets that guarantee community benefits and development from mining revenue. The mining sector has a number of issues affecting governance, transparency and accountability in the sector. However, as PWYP we believe the budget is a planning tool that will also help address governance challenges affecting the mining sector. This write up seeks to present a few tips for PWYP members, communities hosting mining activities and other stakeholders to raise as they participate in the budget national consultations. Below are thematic points which can be included in the 2021 National Budget to address mining sector governance challenges and improve the capacity of the mining sector to contribute towards sustainable development in Zimbabwe.
The Artisanal Small-Scale
Mining Sector has been associated with a number of disputes arising from
multiple claim ownership. There is no transparency in the awarding of claims, and
this has fueled corruption leading to loss of claims by women and men in the
sector. Ultimately, this has affected livelihoods for a number of women. This
was revealed in a study that was done by the Zimbabwe Environmental Law
Association on criminality in the ASM sector. The 2021 National Budget must
ensure that this system is operational and implemented.
Transparency Initiative (EITI)
Through the 2020
National Budget the government indicated that it was going to pursue
stakeholder discussions on EITI adoption. However, the Mid Term Budget review
was silent on the progress with regards to EITI adoption in Zimbabwe In terms
of budget transparency rankings for Zimbabwe released in July, 2020, the
country recorded an increase in its Open Budget Survey (OBS) score from
23 in 2017 to 49 in 2019 and has been ranked number three in Africa after South
Africa and Namibia. OBS is conducted by International Budget partnership (IBP)
and provides transparency information on three elements namely access to budget
documents, participation of people in the national budget and the oversight
role of oversight institutions such as parliament and the Auditor
General’s office. Despite this improvement, the country’s OBS figure is still
below 61 which is considered the minimum level of budget transparency that
allows meaningful public engagement throughout the budget process. The ability
of any country to score very good figures on the OBS rankings depends on the level
of public disclosure of information on economic management among other issues.
Current research has shown that countries that have adopted EITI have been
performing well on the Open Budget Survey (OBS) rankings.
This is not a big surprise because there is disclosure of very important
information such as mining contracts. The PWYP Zimbabwean Chapter views that
the adoption of EITI will add value to OBS rankings for Zimbabwe. In July, 2020,
the Minister of Mines and Mining Development, Honorable Chitando indicated that
there is need for in-depth knowledge fair on the EITI concept before joining
implementation of EITI.
The 2021 National Budget must provide a way forward on the mining transparency
of ASM sector
process must support and decriminalize the ASM sector. The Mines and Minerals Amendment
bill must recognize and formalize the ASM sector. There is need to speed up the
review and finalize the bill. 60% of the country’s foreign earnings comes from
mining. In 2019, ASM accounted for 63% (17,478.74kgs) of total gold deliveries
(27,650.26 kgs) to Fidelity Printers. Formalization of the sector will help to
reduce revenue illicit flows from the sector. There are low levels of tax
compliance in the ASM players largely because they are treated to be illegal
and there is no adequate financial support to the sector. The informality of
the ASM activities has jeopardized the capacity of the sector contribute
towards domestic resource mobilization of the country.
have a constitutional right to benefit from extraction of mineral resources in
their communities. The government of Zimbabwe established the Community Share
Ownership Trust Schemes (CSOTs) in 2010 through the Indigenization Economic
Empowerment (IEE) Act. CSOTs no longer have a legal backing, because
government reversed the IEE Framework. The 2019 Midterm budget
review statement and supplementary budget confirmed an end to the Indigenization
Framework. A proposal was made in the 2019 mid-term budget review that a new
empowerment framework will be formulated after the IEE framework was
reversed. Up to date there is no new policy framework that the government
has come up with. There is need for the Ministry of Finance and Economic
Development to speed up the formulation of the new policy framework.
About Publish What You Pay
What You Pay (PWYP) is the worldwide campaign for an open and accountable
extractive industry. We are the only global movement working to ensure that
revenues from oil, gas and mining are used to drive development. With more than
700-member organisations and 45 national coalitions, our strength lies in our
ability to coordinate action nationally and globally, maximizing our collective
impact, so everyone benefits from their natural resources – today and tomorrow.