Mineral Development in the SADC Region: A Policy Perspective

Abstract

This paper identifies political stability as the most important challenge for improving the flow of mineral‐sector investment into the Southern African Development Community (SADC). This challenge was singled out through constructive analysis of responses to a questionnaire on investor opinion. What is required in SADC before investors will risk their resources is to institute true democracy – a prerequisite for political stability − followed by appropriate policies. Member states must unite in pursuing this simple, but difficult to achieve, strategy. The reason why SADC has not developed commensurately with its mineral potential can best be explained by the fact that the region could not sustain political stability for a sufficiently long period of time. Political stability is the most important SADC requirement for instituting policies that make meaningful differences in the lives of ordinary people. It is imperative that SADC member states all get it right at the same time for a sufficiently long period. Conflict in one state affects the flow of investment to the rest of the region.

Notes

1. The SADC region is vast, which explains the outsider’s view that it represents several regions. There is merit in such a view because of the disparity in political events across the region. However, history confirms that the source of conflict may well be in one country, but several other countries are drawn into the conflict issue. This affects the region as a whole. A good example is South Africa during apartheid, which had a destabilising effect throughout Southern Africa affecting the growth of neutral countries like Botswana.

2. The list comprised geological, fiscal, political, operational, marketing, regulatory, profit, environmental, monetary, and other criteria. The analysis in paragraph 2 follows a similar format.

3. The African Development Report for 2003 shows that Gross Capital Formation as a percentage of GDP increased from 12.2% in 1980 to 22.5% in 1990 to 53.3% in 2002.

4. See table 1.

5. See Tables 1 and 3.

6. See table 1.

7. See table 1.

8. See table 4.

9. See Tables 5 and 9.

10. See table 5.

11. See table 8.

12. See table 8.

13. The table captured the best and worst countries in terms of general investment conditions. Countries such as Angola, Mozambique, Tanzania and Zambia were regarded as providing average investment conditions.

14. Constitutive Act of the African Union (2000), Article 3 Objective (f).