Lets Break down the Ownership of resources into a simple analogy

An image from the twitter account of Zambia’s President, and a comment made by a well known Pan Africanist

It’s not just about jobs or income taxes, but what the proportional benefit a country receives from it’s own resource.

If I take a rare stone from your garden & give you US$10 but sell a refined version of the stone for US$1000, it may be a fair business practice, but you haven’t benefitted from your resource..
If you happen to be poor, your kids sometimes going without enough food, you’re failing to afford medicines, you can’t look after your family, and yet you’re only getting 1% of a rare resource that belongs to you!?🤨

How is that fair or right?

Imagine if instead of $10, I gave you $400 after I had sold the stone i took in your garden..can you see the clear difference on how much more you would receive?

It may cost $100 to refine the stone, but $400 represents a much fairer dividend to you, for what is your own resource. Even if it costs $200 to refine the resource, you’re still getting a good deal.
In actual sense, you’ve done a huge favour to the person who took it away, to refine it, and sell it onwards. You could have borrowed some money, bought the machinery to refine the stone, did the refinery on your own, and sold the stone yourself for $700, $800 … a buyer would have been found. There was no real reason for you to share the wealth from your garden with them. It points to your goodness of heart…not the other way round.

For poor families that live on less than a couple of dollars a day, that $400 can be transformative, meaning for a poor country, it can make all the difference, and provide resources for much needed things.

We need to establish a fairer way of working within the resource exploitation sector. Our officials should understand these things and replicate contracts that were common in Tanzania, under John Magafuli, and that are standard in Rwanda, Botswana and the like. It’s nothing revolutionary. And this is even before we start talking about adding value…

Unfortunately some investors won’t voluntarily award the host countries they invest in(to mine resources) the fair and proportionate amounts which should be due. For these investors, maximum profit is the mantra, and the citizens of the country from where the resource came never get to know how much profit the investor goes on to make. It’s no wonder then that poverty persists – because the little these people own, and have, even that is bought for a pittance!

So it is incumbent on the Government of the country, and officials at Energy and Mining Ministries to establish policies that ensure that such transactions are fair, proportionate, considerate, and ethical. They must be transparent all the way to the eventual transaction after value addition. That way, people get to see and know the actual value of their resources, and can know if they’ve been short-changed.

It’s not only the right thing to do to help poor countries raise resources, but it’s the humane thing to do.

This is how we will begin to fight inequality, this is how we begin to raise resources for tackling poverty, for building infrastructure, for creating jobs, to buy medicine, to fix our roads, to repair our hospitals, for growing our countries into middle income countries… Please see the next post which is about Paladin.

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