Africa: Natural resource nationalism

By Mary Alorh

One of the most significant insights gained from the COVID-19 pandemic was the impact it had on the various economies across the African continent. Efforts to enhance African economies were already underway, focusing on how countries could leverage their natural resources to improve the livelihoods of their citizens.

In 2019, Zambia’s Ministry of Mines and Mineral Development implemented new laws aimed at increasing revenue for the economy. This initiative led to discussions with several companies, including Vedanta Resources, an Indian firm that sought legal action to prevent the government from restructuring its subsidiary, Konkola Copper Mines (KCM).

Undeterred, the Zambian government proceeded to collect samples from mining sites nationwide to investigate the prevalent practice of undervaluing production to reduce tax liabilities. This approach aims to close loopholes in revenue collection from mining enterprises.

The Democratic Republic of Congo (DR Congo), despite being one of the wealthiest nations on the continent, continues to grapple with widespread poverty among its citizens. In an effort to ensure fair compensation for its natural resources, the government introduced a new mining code in 2018.

This code included an unexpected 50 percent tax on windfall profits and additional fees. It also mandated that Congolese citizens must own at least 10 percent of shares in mining companies. This policy faced significant resistance from predominantly foreign-owned mining firms, but the government remained steadfast, prioritizing the interests of its citizens.

Prioritizing citizens in discussions about natural resources and advocating for fair reforms in legacy contracts with foreign companies is essential for sustainable development

In 2018, the Ghanaian government called for the elimination of fiscal incentives aimed at attracting investment, such as tax holidays and royalty exemptions. The rationale was that these investments should ultimately benefit the African populace. Consequently, measures were implemented to ensure that local communities and citizens gain from mining activities.

Tanzania, in 2017, enacted a series of laws allowing the government to renegotiate its shareholding rights and increase royalties on minerals and metals. The government also revoked licenses from Barrick and Glencore, enabling thousands of small-scale miners to take over operations.

In August 2024, Senegal established a commission to review all mining contracts to ensure they align with national interests.

The ongoing marginalization of citizens in resource mobilization has resulted in persistent instability. Countries like Nigeria and the DR Congo have experienced insecurity stemming from discontented citizens, leading to terrorist and rebel activities. When people feel excluded from the benefits of their country’s resources, it can trigger political instability and coups.

Prioritizing citizens in discussions about natural resources and advocating for fair reforms in legacy contracts with foreign companies is essential for sustainable development.

Mary Alorh is Director of Administration at DefSEC Analytics Africa Ltd., and is an expert in Gender, Youth, and Peace & Security initiatives in West Africa.