Several of Africa’s regional economic communities have water resource management and coordination programmes. But only four—Economic Community of the Great Lakes Countries (CEPGL), MRU, SADC, and the Economic Community of West African States (ECOWAS)—have significant activities in the water sector. MRU and CEPGL made some impressive achievements before hostilities between members dis-abled them. Stability is only gradually returning to the subregion.
SADC has the most advanced water sector integration of all African regional economic communities. It is the only community with a special protocol for addressing water issues. All members except the Democratic Republic of Congo signed the protocol in August 2000. The protocol led to 44 projects, of which 31 projects form a regional strategic action plan for integrated water resources development and management among member states. While SADC still has a way to go, especially in harmonizing national water laws and policies, the protocol shows that members are committed to integrated water management. The negotiations, though difficult, strengthened mutual trust, equity, and ownership.
SADC’s experience offers a model for cooperation between river basin organizations and regional economic communities across Africa. The activities of regional economic com-munities and river basin organizations sometimes overlap, requiring rationalization of relationships and coordination of activities within and between organizations (table 8.1).
Revitalizing Africa’s river basin organizations is an urgent priority, requiring political and financial support
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Table 8.1
River basin organizations in Africa: Members, objectives, and activities
Regional economic
River basin Member communities
organization states Objectives and major activities covered
Gambia River Basin The Gambia, • To implement accord on use of water of the Gambia River ECOWAS,
Organization Guinea, including navigation. MRU,
Guinea-Bissau, • To promote and coordinate studies and works for development UEMOA Senegal of the basin.
• To conduct technical and economic studies at the request of member states.
• To implement common works and direct agencies responsible for their operation and management.
Kagera Basin Burundi, • To undertake multicountry development projects in agriculture, COMESA, Organization Rwanda, technical education, environment conservation, hydroelectric CEPGL,
Uganda, projects, transport and communication, and documentation ECCAS Tanzania and information dissemination.
Komati Basin South Africa • To plan and regulate the sharing and use of Komati Basin waters. SADC and Water Authority and Swaziland • To execute and operate Driekoppies Dam and other major works SACU
on behalf of the two riparian states.
Lake Chad Basin Cameroon, • To plan and execute basin projects of both regional and national CEMAC, Commission Chad, Central character in agriculture, irrigation, road transport, ECCAS, African Republic, telecommunications, fisheries, and livestock. ECOWAS,
Niger, Nigeria • To collect and disseminate data. UEMOA
• To conserve lake flows and regulate navigation.
• To promote rational use of water.
Mano River Union Liberia, • To promote regional links via transport and communication. ECOWAS, Sierra Leone, • To promote interstate trade and commerce, customs, excise, UEMOA,
Guinea and tariff harmonization. MRU
• To promote training in forestry and marine sciences.
• To promote development of regional hydropower generation and interconnection and irrigation projects.
Niger River Basin Benin, • To promote interstate cooperation for integrated development ECOWAS,
Authority Burkina Faso, of natural resources of the river basin. MRU,
Chad, Côte d’Ivoire, • To harmonize national development policies related to water UEMOA Guinea, Mali, resources.
Niger, Nigeria • To prevent environmental damage and support conservation, including prevention and control of water pollution and promotion of human health.
Nile Basin Burundi, • To develop the water resources of the Nile Basin in a COMESA, Initiative Democratic Republic sustainable and equitable way to ensure prosperity, ECCAS,
of Congo, Egypt, security, and peace for all its peoples. SADC, EAC, Ethiopia, Eritrea, • To ensure efficient water management and optimal use CEPGL,
Kenya, Rwanda, of the resources. IGAD
Sudan, Tanzania, • To ensure cooperation and joint action among riparian countries. COMESA, Uganda • To target poverty eradication and promote economic integration. SACU, Okavongo Basin Angola, • To promote and foster close intercountry cooperation for achieving SADC Commission Botswana, environmental and other developmental needs of the concerned
Namibia countries, with particular emphasis on equitable and sustainable development of water resources of the Okavongo River.
• To support technical assistance and advisory services, water resources conservation, equitable allocation, conflict resolution, environmental protection, and alleviation of short-term water shortage.
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SADC overlaps with three river basin organizations (Zambezi River Authority, Okavango Basin Commission, and Komati Basin Water Authority), all of which func-tion fairly well. These organizafunc-tions participated in the conferences and contributed to the project ideas that make up the regional strategic action plan. The Nile Basin Initiative is another model (see box 8.1).
The way forward
The main challenge in water resources management is to create an enabling environ-ment that encourages joint manageenviron-ment of transboundary water resources. To ensure the availability and effective use of water resources, today’s multiple arrangements should be rationalized—guided by the principles of equitable rights and sustainable and efficient water use.The weaknesses of river basin organizations should be addressed in line with best practices in Africa and elsewhere. And cooperation should not be lim-ited to countries with shared water basins: it should extend to cooperation between sub-regional groups as well. Regional economic communities overlapping with river basin organizations should work together to achieve the goals of the African Water Vision for 2025 and the New Partnership for Africa’s Development. Moreover, interaction between those groups and national water structures would ensure that national goals are aligned with development possibilities—including those for increased hydropower.
Mining
Regional cooperation and integration in Africa’s mining sector are being driven by sev-eral realizations:
Table 8.1 (continued)
River basin organizations in Africa: Members, objectives, and activities
Regional economic
River basin Member communities
organization states Objectives and major activities covered
Senegal River Basin Senegal, • To promote intercountry cooperation. COMESA,
Organization Mali, • To coordinate technical and economic studies and other activities ECOWAS, Guinea, related to the Senegal River development (navigation, irrigation, MRU, Mauritania hydropower generation, environmental protection, conservation). UEMOA,
• To regulate river flow for irrigation, flood control, power generation, UMA and other purposes.
Zambezi River Zambia and • To operate, monitor, and maintain the Kariba complex. COMESA, Authority Zimbabwe • To investigate the desirability of constructing new dams and to SACU,
do so if approved. SADC
• To collect and store hydrological and environmental data for its functions and benefit of contracting states.
• To regulate water level in the dams.
• To ensure efficient use of the waters and other resource of the Zambezi.
• To monitor water quality, flood forecasting, environmental protection, and conservation.
Source: UNECA 1996, 1998, 2000b.
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• Most countries lack the critical mass required to develop the sector.
• A larger, unified market would foster downstream value added and help develop regional financial systems (such as stock exchanges), easing dependence on foreign investment.
• Only by exploiting economies of scale will countries be able to attract and retain the resources (financial, technical, and human) needed to promote growth in the sector.
Mining plays a crucial role in many African economies, accounting for more than half of export earnings in seven—from 50% in Sierra Leone to 85% in Guinea (World Bank 2002). In some countries (such as Botswana) mining accounts for a third of GDP.
Africa produces 77% of the world’s platinum; 62% of aluminum silicate; more than 50%
of vanadium and vermiculite; more than 40% of diamonds, palladium, and chromite;
and more than 20% of gold, cobalt, uranium, manganese, and phosphate rock.
Regional integration in mining is not a new concept in Africa. Many of the regional road and rail networks constructed in Southern Africa during colonial times were designed to support and integrate mining activities. For example, a railway was extended to the copper belt in Zambia to ensure that mineral products could be economically hauled to ports, and national energy grids were extended to meet the needs of the cop-per industry.
More recently, cooperation in mining was articulated in the early 1980s with adop-tion of the Lagos Plan of Acadop-tion. During the 1980s and 1990s regional conferences of ministers responsible for mineral resources were held under the auspices of the Economic Commission for Africa. These forums embraced country collaboration schemes ranging from simple information networks to more complex attempts to adopt common policies and harmonize legislation, standards, procedures, and prac-tices. Recommendations tended to reflect the state-dominated nature of the mining sector: advocating stronger subregional public institutions, allocating additional resources to the sector, and promoting mineral-based industries. While these efforts increased awareness of important issues affecting mining in Africa, to succeed, regional cooperation needs to be based on action plans with time-bound tasks.
Role of regional economic communities
SADC has the most active cooperation and integration programme for mining. The West African Economic and Monetary Union (UEMOA) and ECOWAS have also made important efforts in regional cooperation. The Inter-Governmental Authority on Development’s (IGAD) development objectives involve natural resources, but this has not been translated into policies and action plans. CEPGL and MRU had rela-tively active programmes in the mining and mineral sectors, but activities were signif-icantly affected by the instability that prevailed in these regions until recently. Most of the other regional economic communities do not have clear-cut policies or action plans for integration of the mineral sector.
Mining plays a crucial role in many African economies
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Despite the relative inactivity of many regional economic communities in the mining sector, most countries in West and Central Africa have adopted modern mining legis-lation and adequate fiscal policies—including Burkina Faso, Chad, Côte d’Ivoire, Ghana, Guinea, Mali, Niger, and Togo. Other countries are preparing or introducing new legislation, including Benin, Central African Republic, Cameroon, Democratic Republic of Congo, Gabon, Guinea-Bissau, and Nigeria. New legislation has been one of the main factors contributing to the increase in exploration, new mine development, and mineral production since the mid-1990s.
Still, most regional cooperation and integration efforts in the mining sector have failed to achieve their goals. Among the reasons:
• Many regional economic communities have a broad framework for cooperation, but no specific provisions for cooperation on mining. Thus they lack regional insti-tutions and mechanisms for developing mineral resources.
• Supportive infrastructure is lacking, including for research and development.
• Information flows are weak.
• Cooperation is inhibited by the perceived strategic nature of mining, the empha-sis on protecting information, and competition among countries and private firms.
Few efforts have been made to harmonize mineral policies, laws, and regulations and to adopt common safety and environmental standards. Most African countries com-pete against each other by trying to offer potential investors the most attractive invest-ment terms. Mining codes and regulations are constantly being reviewed, with no attempt to harmonize them within regions.
One of the most glaring deficiencies has been the failure to develop common invest-ment policies and fiscal codes. For example, fiscal data for Mauritania and Morocco, in UMA, show that while corporate tax rates are similar (40% and 35%), import duties on mining equipment are zero in Mauritania but can reach 10% in Morocco. In the Common Market for Eastern and Southern Africa (COMESA) corporate taxes are exempted for 15 years in Egypt but can reach 45% in Ethiopia. Government partici-pation in mining ventures can be up to 60% in Egypt (with 50% free carried interest), but is zero in Ethiopia, Kenya, and Rwanda. There are also disparities in the fiscal codes of member states in ECOWAS. Government participation ranges from zero in Guinea to 33% in Niger. In contrast, fiscal codes in SADC are more harmonized, with similar corporate tax rates and royalties.
Regional economic communities do a better job on exchanging mining information than in harmonizing policies because 31 African countries are members of the Pan-African Network for a Geological Information System (PANGIS) and PANFACT, both data exchange networks. But performance is poor on cross-border projects and joint exploration and exploitation of mineral resources.
Few efforts have been made to harmonize mineral policies, laws, and regulations and to adopt common safety and environmental standards
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SADC is the only regional economic community with a protocol on mining. The pro-tocol provides a framework for cooperation and integration on mining activities, iden-tifying specific areas for cooperation, including harmonizing national policies, facilitating the development of human and technological capacities, promoting private sector participation in the region’s mineral industry, and observing international stan-dards for health, safety, and environmental protection.
In a number of areas, particularly geology, SADC can be an example for other regional economic communities. Perhaps its greatest contribution has been the cre-ation of a common geological infrastructure in Southern Africa for the use of com-mon geological survey technologies for data processing and harcom-monized standards for map publishing.
The way forward
Although mining investments in Africa have increased in the past decade, mining con-tinues to be export-oriented, with few local benefits and little value added. While the Lagos Plan of Action and the treaties of several regional economic communities call on African countries to process raw materials to create a self-sustaining industrial base, this has not happened in most African countries. Many mineral-based economies have been unable to harness the economic power of mineral exports as a means of economic diversification and sustainable growth.
Africa’s dependence on foreign direct investment is pronounced in mining because of the sector’s capital-intensive nature and the lack of domestic financial systems capable of mobilizing enough risk capital to facilitate the creation of indigenous medium-size mining companies. Regional cooperation arrangements need to consider how to cre-ate this “missing middle” and how to involve privcre-ate operators in the institutional framework for regional cooperation and integration. Other stakeholders too—local communities, nongovernmental organizations, labour groups, environmental groups, and civil society in general—are becoming active in shaping the new agenda for min-ing and also need to be involved in the institutional frameworks.
In building partnerships for programme delivery and implementation, the focus should be on:
• Harmonizing mining policies, laws, and regulations to ensure that they are com-petitive and that the investment climate is attractive to investors—while preserv-ing the state’s rights to equitable returns.
• Making Africa a more competitive exploration destination. Africa should bench-mark itself against its competitors (such as Latin America), encourage invest-ments in national geological surveys, promote the creation of digital archives at the national and regional levels, and harmonize standards and procedures with a view to improving national and regional connectivity and reducing data procure-ment and other transaction costs. In addition, cross-border projects should be Regional cooperation
arrangements need to consider how to involve private operators in the institutional framework
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undertaken to map the continent’s mineral resources and produce joint regional thematic maps.
• Strengthening government institutions to ensure better management of the min-eral sector, particularly licensing mechanisms and enforcement of safety, labour, and environmental standards.
• Strengthening links between mining and other sectors to ensure greater mineral resource development and better management of mineral rents.
• Facilitating entrepreneurship and the development of the “missing middle” by introducing new regional vehicles for investment and by revitalizing and bringing the Johannesburg Stock Exchange up to the level of capital markets in the devel-oped world with a view to creating enough liquidity and volume of trade to attract investors.
• Transforming small-scale mining by ensuring that mining laws and regulations protect the security of tenure of small miners and that institutional actions are strengthened in the areas of technical and marketing support, business and tech-nical training, and access to finance.