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03.05.2004 Business & Finance

Extractive sector needs analysis

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Accra, May 3, GNA - The Africa Initiative on Mining, Environment and Society (AIMES), a nongovernmental organisation (NGO) on Sunday urged African governments to conduct adequate and independent cost-benefit analysis on the extractive sector to determine the effect it was having on their socio-economic development.

It said AIMES at end of its three-day consultative meeting in Accra from April 30 to May 2, observed that the increased extractive sector activity has led to increasing debt burden of African countries and a declining quality of life for peoples living in those communities who derived cosmetic, little or no benefit from such industries.

The meeting, which was attended by 30 participants drawn from Angola, Ghana, Guinea, Madagascar, Mali, Mozambique, Nigeria, South Africa, Tanzania and Zambia with observers from Canada and the United Kingdom, was held under the auspices of The Third World Network (TWN) - Africa.

It discussed the pressing challenges facing Africa's extractive sector with particular reference to mining, oil, gas and forestry.

Declaring its position in a communiqu=E9 the AIMES said although the extractive sector might be perceived as catalyst for economic growth and development yet its operations were "generating problems, which affected environmental diversity and quality, community livelihood, peoples rights and social dislocation and health impact".

The meeting noted that the attitude and behaviour of the State and its institutions was hostile towards its citizens, who were determined to promote their interest and rights vi-a-vis that of multi-national corporations.

"There are instances across Africa where we witness State repression through the use of private and State security apparatus against communities and citizens for expressing dissenting views or making legitimate demands".

It said it was noted that the "political and administrative structures of the States are too weak to address extractive sector impacts more so when these structures are compromised by corruption and abuse of power".

The meeting said although it welcomed the principle behind regional integration yet it was concerned about institutions and neo-liberal development frameworks which would further advance globalisation and increase exploitation of Africa's extractive sector. It noted that NEPAD "as a regional development framework has already set the stage for excessive exploitation of Africa's mineral resources"

The meeting "regretted that while NEPAD identifies mining as a critical area for market access for achieving sustainable development in the 21st century it however fails to develop adequate strategies for maximising the returns and mitigating its impact".

The meeting observed with concern that the policy prescriptions by the International Monetary Fund (IMF) and the World Bank Group and agreements within the World Trade Organisation (WTO) were inconsistent with the development needs and priorities of African countries, which although endowed with minerals were being pitched in competition to the bottom.

"Indeed, under the WTO agreement on trade in services, multilateral and bilateral donors are fragmenting African economies by demanding liberalized services."

The meeting demanded that African governments should reject the trade in services agreement of the WTO.

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