Indaba of words, vainful stories
FOR the Mining Indaba to be meaningful reflections should consider how to change the historical trajectory of African economies towards prosperous futures.
An indaba as a Nguni word means a story told, a tale engaged, testimony presented. It must make lives stronger and futures better, communities more united in their dreams and efforts. To meet this expectation, this indaba should look beyond traditional talk about the commodities economies and focus on rethinking how mining helps build the nations of the future, wholly prosperous and peaceful.
In this regard, the words of the Zambian president, Hakainde Hichilema, are poignant: “All of us on this continent should not accept as a fact that we don't have sufficient power to drive our mining sector and other industries. We do have. We just have not been doing the work that we were elected to do.”
Despite many changes in the African economy, the mining of key mineral resources remains a key mainstay. Africa has bountiful reserves of minerals and metals such as copper, iron ore, coal, gold, diamond, and increasingly popular cobalt and bauxite. Many of these are mined in southern Africa as it has been the case for about 140 years now. South Africa, the Democratic Republic of the Congo, Namibia, Zambia and Zimbabwe are some of the major players in this commodities economy.
The commodities mined in generally poor regions of Africa are some of those that have sustained high demand in the global commodity trade in the past three decades of tectonic changes in the nature and character of economics the world over. It seems the constant supply of commodities helped sustain the world economy during its recent two major catastrophes, the global financial crisis from 2008 and the economic ravages of the Covid-19 pandemic in 2020 - 2021.
Between 2000 and mid-2008, there had been a major economic boom driven by soaring commodity prices disrupted by the late 2008 financial crisis that pushed the world economy into a recession. As a result, commodity prices declined, sometimes sharply, revenues were wiped off, worker income declined, and jobs were lost especially in poor countries. But it was commodities that kept many economies in Africa and beyond afloat.
We now know that the behaviour of the commodity industry can be a predictor of the conduct of economies of developing and emerging economies. The pre-2007 boom was driven by a persistent economic growth of these economies driving commodity demand up. African commodity producers benefited at least in terms of broad revenues and investment figures.
Covid-19 caused the same shocks as the 2008 financial crisis, leading to price volatility again that negatively affected commodity-producing economies in Africa and beyond. The postCovid economic recovery has begun, and commodities are a crucial part of this recovery.
Two dilemmas face us in this regard. The first is the talk about transitioning away from a commodity-dependent economy for reasons that have to do with the need for more efficient and environmentally friendly economies as well as the worry about the volatility of the commodities markets. This talk seeks to see beyond mining, but
the alternatives are not very clear for mining-based economies. The talk is a lot more convincing than the actual reforms undertaken on the economies.
You just have to visit the towns of Welkom and Virginia in the Free State to see the ruins left by a century of wanton mining that has not died and the absence of an effective replacement for the dead mining industry. It is not just the huge holes and mountains of underground soil that disturb a concerned eye, but it is also the declining human settlements, poverty, growing criminality, infrastructure that is wasting away, and despair that has been left behind.
The second dilemma is that the mining stakeholders are being urged to embrace new technologies for more efficient and possibly more ecologically clean mining. But this threatens jobs in an already dire situation due to a long history of job losses in this industry. As the Indaba is taking place,
mining workers are on strike over pay demands in a period where mining executives have seen a steady increase in their incomes, thus driving income inequality.
These challenges lead to a third one, that will require new thinking from all stakeholders involved. This thinking involves how to manage transitions taking place in the global economy and in commodities economies. It includes how we invest what we make from mining to make hay while the sun shines.
The National Development Plan (NDP) advocates a strong leadership, an active citizenry and a capable and developmental state as critical in driving the changes needed. These need to produce a much stronger social compact by uniting all stakeholders in the mining sector to manage current challenges and future transitions. The NDP envisages strategies that connect economic reforms to development and nation-building in ways that suggest a broader structural transformation of South Africa than we are often willing to undertake.
President Hichilema is correct. Political leaders have a large measure of responsibility upon their shoulders to drive the changes that Africans want. After all, they have promised a better life for all, working economies and stable countries. They have the responsibility to build compacts for positive and progressive change as envisaged in the AU Agenda 2063's commodities strategy and echoed in the NDP. They were elected to build a developmental state that is democratic and capable of driving whole-of-society changes. If they fail, it is the economies that we bleed, the poor communities that suffer the neglect and the poor workers that will lose their livelihoods.
They have so far been eloquent in repenting of their sins as Hichilema does. They have been excellent in presenting credible analyses of the situation as did President Ramaphosa referring to the value chain from declining mining to erratic energy production to dissipating infrastructure during the Indaba. They have also suggested useful responses to challenges as did Mineral Resources Minister, Gwede Mantashe when he spoke passionately about beneficiation.
But they have not been that remarkable in using the huge power they have to drive the changes they so eloquently vocalise. This is a failure of leadership in action, the failure to drive change fast enough to avoid further socio-economic crises. It is a failure the political leadership shares with the industry and economic leadership. Political parties, parliament and voters have also not used their power to signal unhappiness with this failure over the past 3 decades.
Indaba will remain an indaba of vainful stories until leadership shifts to making it an they say in isiZulu to mean a remarkable testimony of things done.