1. Perspectives on the importance of Mining to National Economic Planning By: Innocent Madziva Deputy Director, Economic Modelling MEFMI candidate Fellow-Natural Resources Management Ministry of Macro-Economic Planning & Investment Promotion

2. Presentation Outline Introduction Macroeconomic Framework
Importance of Mining to National Economic Planning
Mining success in National Economic Planning
Conclusion

3. Introduction
In National Economic Planning, minerals are usually given a special attention because:-
they are a waste resource
they belong to the nation (Section 3 (2) j of the new Constitution of Zimbabwe)
The role of Government is to manage the sustainable exploitation of these resources in order to maximise the socio-economic benefits for both the current and future generations

4. Introduction Cont’
ZIMASSET ( ) places the mining sector as a key driver of economic growth
Since 2009, the sector has been a major foreign currency earner (contributing more than 50%).
The mining sector in Zimbabwe is one of the few sectors that has relatively performed well (in terms of contribution to GDP) and in line with ZIMASSET targets over the period 2013 to date.
5/13/15

5.  Macro-Economic Framework
2012
2013
2014
2015
2016
Actual
Estimate
Initial
Rev. Prj
Agriculture, hunting and fishing
7.8
-2.6
23.0
-5.2
-9.9
-4.2
Agriculture (ZIMASSET)
-1.3
9.0
5.1
7.0
Mining and quarrying
8.0
11.7
-3.4
0.4
14.0
13.2
Mining and quarrying (ZIMASSET)
6.5
11.4
9.2
Manufacturing
5.3
-0.6
-5.1
0.2
0.5
Manufacturing (ZIMASSET)
1.5
3.2
7.5
Electricity and water
0.3
5.0
5.4
-5.5
-21.8
Construction
23.5
3.9
6.9
4.0
4.5
1.8
Finance and insurance
28.0
11.3
7.7
4.6
6.4
2.0
Real estate
59.0
0.7
4.7
3.5
3.4
Distribution, hotels and restaurants
4.3
2.5
2.4
2.8
Transport and communication
6.7
1.1
1.9
3.0
Public administration
19.1
6.3
1.2
0.0
-5.0
Education
38.1
2.9
4.2
2.6
Health
-0.7
Domestic services
-3.5
6.0
2.2
1.0
GDP at market prices
10.6
3.8
1.4 “
Source: Ministry of Macro-Economic Planning & Investment Promotion, ZIMSTAT, Ministry of Finance, RBZ and ZIMASSET

6. Importance of Mining to National Economic Planning
Mining and Poverty Reduction
Both large-scale mining and artisanal and small-scale mining reduce poverty through the linkages four dimensions of poverty which are economic opportunity, capability, security, and empowerment

7. Importance of Mining to National Economic Planning
Fiscal impact and foreign exchange income.
Mining can be an important source of foreign exchange and fiscal receipts for governments. When managed well, the net foreign exchange and taxes generated by mining can be used by governments as an engine for overall economic growth and as a funding source for social sector and poverty reduction programs

8. Importance of Mining to National Economic Planning
Local economic development
Large mining operations often invest substantially in local economic development through training, social services, and public goods such as clean water, transport, energy, and other infrastructure

9. Importance of Mining to National Economic Planning
Improved land-use planning
Geoscience and mapping data collected for mining purposes can contribute to improved land-use planning. This can benefit the poor by helping identify and address issues related to competing land uses, which in turn helps to avert negative impacts on agricultural production and food security.

10. Importance of Mining to National Economic Planning
Source of energy
In countries with significant coal resources, such as China, India, Zimbabwe and South Africa, coal is an important source of energy contributing to economic growth.

11. Mining success in National Economic Planning
Emperical evidence has shown that mining success does not only depend on the number of minerals that a country has nor the grades.
For in countries with an overall poor governance record and weak institutions, mineral wealth frequently does not translate into development.
Instead, sudden mineral export booms in many cases led to severe economic imbalances, rising corruption and armed conflict

12. Conclusion Success tend to depend on:-
Long term Economic Planning and de-linking Economic cycles with Political cycles
Negotiation of Contracts and Ownership structures
Strong institutions
Mineral governance-Transparency and accountability
Efficient and Responsive Mining Fiscal Regimes
Prudent management of Mining revenue-Survival beyond extraction

13. Norwegian Experience

14. Botswana Model 15% 80.8% of profits 50% of dividends Corporate taxes
Others
Government of Botswana
Anglo American
80.8% of profits
15%
50% of dividends
Corporate taxes
85%
DBsa UK Ltd (Diamond Trading Company)
15%
De Beers
Investments
Exploration holding structure
De Beers Societe Anonyme (Lux)
De Beers Canada
50%
50%
Debswana
DTC
Botswana
Namdeb
50%
50%
De Beers Consolidated Mines (South Africa)
Joint control

15. Thank You!