Former UK PM Tony Blair
Photo by: Bloomberg
CAPE TOWN (miningweekly.com) – The mining industry remained absolutely vital for Africa’s economic future, former UK Prime Minister Tony Blair told the Mining Indaba on Tuesday.
Even with the sharp declines in commodity prices, tremendous opportunities remained for an adjustment and a reshaping of mining in Africa into a government/private sector partnership embracing the development of power, water and transport infrastructure, Blair told the 7 000 attending mining professionals.
“Africa is going to change enormously in this next decade. Whatever the problems, if you take Africa as a whole and compare where it is today with where it was 20 years ago, the progress has been enormous,” Blair said.
The former UK Prime Minister pointed out that the ten top growing economies in the world were currently in Africa, where economic growth should be around 5% and the middle class was set to double.
The composition of Africa’s economy was changing both in terms of gross domestic product and in terms of sector growth, such as tourism to Africa, which had trebled in the last decade.
The investment of China in Africa was immense and international financial institutions were showing greater willingness to invest in infrastructure on the continent, including US Aid, which was taking a far bigger role in African development, along with countries like India, Brazil and countries in the Middle East.
This was creating a paradigm shift in relations between the outside world and Africa, which was moving from a relationship of dependence to one of partnership.
Blair recalled a report published ten years ago which outlined how Africa required not only debt cancellation but an end to the past donor-recipient relationship. In mining there was a move away from mere transactions towards relationships, with governments wanting something deeper and richer, and companies requiring infrastructure, education and skills development.
This was all part of a trend of change in Africa, on which the outside world was looking more positively and where countries were realising that they had to resolve infrastructure and corruption issues.
In some respects, Africa was poised to rival even Asia’s economic ascent.
“I am an African optimist for objective as well as emotional reasons,” Blair said.
Today’s mining investors in Africa were expecting cooperative development of roads, rail and power, for which there were large pools of available capital including international sovereign funds.
“I think there’s a great opportunity for mining companies to collaborate with the funds for the development of infrastructure for the benefit of countries as a whole,” Blair said.
Investors needed to be cognisant of the needs of local business and local communities and governments needed to take measures to reform education systems and improve skills levels.
Transparency and the absence of corruption were needed on both sides of the line, with companies paying their taxes and governments ensuring the predictability of taxation systems.
The single biggest obstacle between success and failure lay in the ability of governments to get things done.
“Saying is a lot easier than doing and what we focus on with African governments is precisely that. Privatisation sounds easy but it’s hard,” Blair commented.
To engage in contractual relationships and work out the best deal for the country was very difficult and governments should invest in the best advisers to assist them.
As it entered a new era, he postulated that Africa should seek to deploy economic diversification initiatives during the good economic times to hold the countries in good stead for when global economies turned down.