At the dawn of independence in 1990, a public servant working in an entry-level position for the state could afford to buy themselves a home, a car, and send his children to school with a lunchbox for break-time. However, the rising cost of living has ushered in a phenomenon referred to as the ‘working poor’ where relatively young people, even those working at supervisory level, cannot afford to buy themselves homes and end up renting apartments in complexes if they are lucky. Many young people, especially in the capital city of Windhoek, have delayed moving out of their parents’ homes because, for them, affording a dwelling of their own is a pipe dream. Houses in Namibia, which are usually financed through a mortgage loan from one of the country’s four commercial banks, are only accessible to the middle class and those with a household income of at least N$35000 (USD 2000) and above.
The average wage in Namibia, according to the Wage Indicator Foundation, is estimated at N$3240 (US$187) per month. Low wages, rising inflation, and high unemployment (which results in black families having the burden of taking care of other family members) are all factors that contribute to the phenomenon of the working poor.
The free-market policies that Namibia’s government assumed at independence can also be seen as a contributing factor to the phenomenon of Namibia’s working poor.
Free Market Fundamentalism
Free market Fundamentalism is a term applied to a strong belief in the ability of unregulated markets to solve most economic and social problems. But what happens in an economy with an oversupply of labor and no industry to absorb that labor?
Well, the principles of supply and demand suggest that labor will be cheap in such a scenario, and employers are spoiled for choice when deciding who to hire and at what cost.
People queuing to withdraw money at an ATM in Windhoek’s Post Street Mall. Credit: Vitalio Angula / Ubuntu Times
In the absence of strong labor unions, the ability for workers to get at least a decent, living minimum wage is eroded!
The absence of a minimum wage for Namibia’s working force is one of the main contributors to the phenomenon of the working poor: people who are formally employed but can’t afford the basics in terms of food, clothing, and shelter, let alone school fees for their offspring, transport, water, and electricity bills.
How Did China Do It?
Following the disastrous Cultural Revolution in China, communist party leader Deng Xiaoping and the Chinese government initiated an open-door strategy aimed at achieving economic growth by actively embracing foreign capital and technology, while simultaneously upholding its socialist principles.
On the other hand, Namibia, at the dawn of independence, adopted a free market economy that they labeled ‘mixed’ and allowed capitalism to reign without proper regulation or oversight by the state.
Deng successfully enhanced the economic well-being of the Chinese populace through the implementation of a political framework characterized by a one-party socialist democracy, with the adoption of a market-oriented economic system.
This meant that there was an improvement in the economic status of Chinese people, which translated into a higher quality of life.
Namibian-based economist Robin Sherbourne states that “in spite of moderate real Gross Domestic Product (GDP) growth rate averaging 4.3 percent and translating into real GDP per capita growth of about 2.3 per year since 1990, this has not sufficiently translated into substantial reduction in poverty, income inequality, and unemployment”.
This was ten years ago, in 2013, and the status quo prevails.
Why has Namibia managed to have year-on-year economic growth that has not translated into employment opportunities, and in instances where those employment opportunities do not translate into a higher living standard for its working class?
Small-scale businesses sell arts and crafts in Windhoek’s Central Business District (CBD). Credit: Vitalio Angula / Ubuntu Times
The answer lies in the extractive industries, which are the mainstay of the economy. On the back of a huge mining sector, Namibia exports raw materials to other countries that manufacture them into finished goods.
Uranium, gold, copper, and diamonds are just some of the natural resources that Namibia is endowed with.
The country also has a huge fishing industry that exports jobs to countries such as Spain and Italy.
The lack of labor legislation and strong trade unions also compounds the tragedy of the working poor because there is no basic (minimum) (living) wage, and workers, especially those who are new entrants into the workforce, take the first offer that is put on the table, which is usually not market-related.
Employers take advantage of the plight of those who are desperate for employment and compensate them a pittance for the output and services they provide.
Inequality and wage disparities are man-made, and there is a need for an ethical dialogue on how to protect the most vulnerable of citizens so that they are protected from an unjust capitalist labor system.
A Lesotho environmental law expert says it is alarmingly troubling that the once pristine African land continues to be sacrificed at the altar of profits by multinational companies extracting the continent’s minerals for financial gains.
Advocate Borenahabokhethe Sekonyela says allowing multinational companies to dirty the African environment and its ecosystems with impunity is a violation of fundamental African customary laws that seek to protect the land.
“The multinational companies are clearly maximizing profits at the cost of life in Africa,” Advocate Sekonyela said.
He says fundamental principles of African customary laws dictate that Africans have full rights to their land and all natural resources beneath that land, including copper in Zambia, diamonds in Lesotho, and coal in Malawi.
“Africans have full land rights protected by customary laws. Customarily, land is an important asset for Africans. In terms of farming, if one does not own a farm but has cattle, there was a butter system arrangement in place to ensure that we all benefit from that land. This was a fundamental economic theory of our African custom.
“The same principle should apply even in mines because God placed Africans there with all those resources and there should have been an equity share in those resources but that is not the case because African governments have leased out mining areas to multinational companies who are sacrificing our land at the altar of profits,” Advocate Sekonyela said.
He said the expectation that mining companies must conduct their businesses in such a way that even future African generations will benefit from their resources is slowly becoming an unrealistic dream.
“Do it in such a way that you do not destroy my land because it is for my benefit and those that will come after me,” he said.
Zambians Look to South Africa for Justice
A South African high court is expected to pronounce itself on whether or not it has jurisdiction to preside over a landmark class action lawsuit against Anglo American mine in the coming months.
This was after 14 Zambian women and children alleged in court papers that Anglo American “massively” polluted their land when it operated and managed a mine in Kabwe, Zambia between 1925 and 1974.
According to Amnesty International and South African Litigation Centre, the 14 Zambian applicants are acting on behalf of “an estimated 100,000 children and women, who report suffering injury from lead exposure as a result of century-long mineral extraction near their homes.”
The applicants want the South African high court to order Anglo American to compensate them for alleged breach of what Zambians have identified as a “duty of care to protect existing and future generations of residents of Kabwe against the risks of lead pollution arising from the Mine’s operations.”
Amnesty International’s Director for East and Southern Africa, Deprose Muchena, has likened this case to a biblical story of “David vs Goliath case and a significant, long-overdue step towards justice for the people of Kabwe, who have suffered from lead poisoning for years due to the mining activities of multinational corporations in their communities.”
Anglo American has been previously quoted in the media saying “we do intend to defend ourselves because we do not believe that we are responsible for the current situation.”
In an interview with Ubuntu Times this month, Advocate Sekonyela warned that the Zambian case was just a drop in the ocean, saying there were thousands of Africans experiencing serious health complications caused by effects of mining pollution.
“Mining dirties water and it does not matter if you were an imperialist or not, I have a riparian right to drink clean water and any type of development should not jeopardize my right to access clean water,” Advocate Sekonyela said.
Lesotho Government Investigates Water Pollution
In March this year, Lesotho’s Ministry of Natural Resources said it is investigating allegations of water pollution by Letseng Diamonds Mine, Storm Mountain Diamonds and Liqhobong Diamond Mine.
“The Ministry of Natural Resources wishes to acknowledge and notes with concern the various articles that have appeared in the Lesotho and South African press recently concerning the alleged pollution of above-average concentration of nitrates in certain rivers that flow into the Katse Dam,” read a press statement circulated on 1st March 2023.
“The validity of the allegations are being investigated and in addition to having instructed the Department of Water Affairs to report to the Minister of Natural Resources Honourable Mohlomi Moleko, on the allegations.”
Mine tailings form plateaus in rural district of Mokhotlong, Lesotho. Patising and Maloraneng communities suspect that these tailing and water seepages are responsible for blue, toxic water they regularly spot in two streams originating from the mine. The mine was previously a beautiful lake in Mokhotlong, Lesotho. Credit: Retselisitsoe Khabo
Government’s investigations come after MNN Centre for Investigative Journalism published a story that the Lesotho Highlands Development Agency (LHDA), an agency monitoring and managing the Lesotho Highlands Water Project, said mines pollution of critical water sources continues unabated despite the mines’ repeated promises to mitigate contamination during joint meetings chaired by the department of environment.
According to the LHDA, the three mines polluting rivers critical to the water project that transfers water to South Africa are Letšeng Diamonds Mine, Storm Mountain Diamonds and Liqhobong Diamond Mine.
Communities downstream Letšeng Diamonds Mine and Storm Mountain Diamonds have accused the two mines of polluting their water courses with impunity, an accusation the two mines hotly deny. Letseng Diamonds Mine is co-owned by Lesotho government (30 percent) and British-based Gem Diamonds (70 percent).
Since it started operating the mine in 2004, Letšeng states on its website that it has discovered precious stones such as a 910-carat Lesotho Legend (2018); 603-carat Lesotho Promise (2006), 550-carat Letšeng Star (2011), 493-carat Letšeng Legacy (2007) and the 478-carat Light of Letšeng (2008). Collectively, the mine made US$81.2 million (M1.2 billion) from four of those five stones.
Storm Mountain Diamonds’ shareholding is held by the Lesotho government (25 percent) and South Africa’s Namakwa Diamonds (75 percent). Storm Mountain Diamonds’ website states that the mine’s 3.06-carat Kao Purple Princess was sold at US$727, 898.
Coal, Uranium Mines Leave Trail of Destruction in Malawi
The Malawi Economic Justice Network (MEJN) says communities around coal and uranium mining areas in that country “face a lot of challenges with water pollution”.
The Network’s Program Officer, Bertha Phiri has accused the Malawian government of “…not doing enough in protecting the rights and livelihood of people living in mining communities.”
“The law is clear on issues of Environmental Impact Assessment and all its related issues but the biggest challenge is laxity in the enforcement of the law. People living around coal and uranium mining areas face a lot of challenges with water pollution and their land is also affected in terms of productivity and farming let alone their health is at risk as well,” Phiri told Ubuntu Times last week.
Phiri is positive that Malawi should learn from the Zambian lead poisoning and argues that Malawi could have enacted a far much better, inclusive Mines and Mineral Act, 2018 had it taken suggestions from community representatives on board.
“The mines and Minerals Act went through a very rigorous process as far as consultations with relevant stakeholders are concerned. However, consultations do remain consultations up until when all the issues, concerns and suggestion that are brought forward are taken on board.
“Our observation is that Malawi missed an opportunity to address its issues and bring sanity in the mining sector learning from the bad experiences we have had with Kayerekera Uranium Mining. So the enactment of the Mines and Minerals Act would have taken on board lessons learnt which in MEJN’s view did not to the large extent besides stakeholders raising the issues during the consultations,” Phiri said.
On April 18, Zimbabwe celebrated its 41st independence anniversary from British colonial rule amid a presidential promise that the country’s mining sector will contribute US$12 billion dollars in revenue by 2023.
The country’s over sixty mineral resources ranging from diamonds, platinum and gold remain under-explored. According to the country’s minister of Mines and Mining Development Mr. Winston Chitando, “Zimbabwe does not know the estimated value of its mineral wealth.”
Despite the huge wealth in mineral deposits, the lives of many Zimbabweans have not improved. In his independence speech, Zimbabwe’s President Emmerson Mnangagwa reiterated his government’s plan to have the mining sector contribute hugely to the economy and improve the lives of citizens. By 2030, Zimbabwe seeks to achieve an upper-middle-income economic status.
“The mining industry is projected to rebound by eleven percent this year. Guided by the strategy to achieve a US$12 billion industry by 2023, programs that include increased exploration, expansion of existing mining projects, resuscitation of closed mines, opening of new mines, mineral beneficiation and value addition are being prioritized,” said President Mnangagwa in his independence speech.
Zimbabwe’s President Mnangagwa addresses the nation in his Independence Day speech revealing that the country’s mining sector will be a US$12 billion dollar industry by 2023 despite Zimbabwe losing over one billion dollars through gold smuggling and illegal trade of the mineral. Credit: Gibson Nyikadzino / Ubuntu Times
Zimbabwe’s goldfields and other mineral fields are today a contested terrain where even the elite and state institutions including the country’s Defence Forces are scrambling for a slice of the cake. In 2008, Mr. Farai Maguwu, the director of Center for Natural Resource Governance was arrested for bringing to attention the abuses committed by Zimbabwe’s security forces in the Marange diamond fields.
The gold sector has not been spared. According to a 2020 report by the International Crisis Group (ICG) gold buyers linked to President Mnangagwa buy the precious mineral on a premium, deterring the gold panners from selling the gold to Fidelity Printers and Refiners, the sole authorized gold buyer.
Resources Plunder By An Intemperate, Predatory Elite
After his dismissal then as Vice President in November 2017, Mnangagwa was accused of amassing wealth by grabbing mines belonging to small-scale miners. “Mnangagwa also grabbed many mines which belong to small-scale miners. He was abusing his authority as the Vice President to grab whatever he wants. We say Mnangagwa must be arrested because he is corrupt, he must face the music,” said then party official Mr. Dickson Mafios at a rally.
In 2018 former Higher Education Minister in Zimbabwe Prof. Jonathan Moyo also revealed that President Mnangagwa’s activities and those of his close circle are despicable that even the United Nations (UN) had to publish a report about their activities in the Democratic Republic of Congo’s (DRC) second civil war.
“The person who led the plunder of resources in the DRC leading to the United Nations (UN) investigating and coming with a report that is still there is Emmerson Mnangagwa along with the military cabal of General Chiwenga and SB Moyo. The person who brought the Chinese to plunder Chiadzwa Diamond Fields up to a point to which we had at the very least from 2007 to 2014 some US$12 to US$15 billion in diamond revenue that remain unaccounted for that went into the pockets of individuals is Mnangagwa,” Prof. Moyo said.
The report titled Plundering of DR Congo Natural Resources: Final Report of the Panel of Experts (S/2002/1146) was published in October 2002.
President Mnangagwa’s name has been implicated in a scandal of six kilograms of gold that were recovered by the police destined for Dubai, allegedly involving his wife Auxillia, son Collins and close relative Ms. Henrietta Rushwaya. Credit: Gibson Nyikadzino / Ubuntu Times
Today President Mnangagwa and his family’s name continue to ring in illegal gold deals. Illegal gold mining or artisanal small-scale mining in Zimbabwe has been a launchpad for many illicit financial flows and gold smuggling out of the country. Home Affairs minister Mr. Kazembe Kazembe in February this year admitted that smuggling and illegal gold deals are costing the country between US$1.2 billion to US$1.5 billion dollars annually.
The First Lady distanced herself from Ms. Rushwaya’s arrest. “I have no dealings nor involvement with Ms. Rushwaya of any illegal kind,” she said. The gold sector in Zimbabwe has become a vital cog in foreign currency earning with many entrants using President Mnangagwa’s name to make inroads.
A US$12 Billion Election Campaign Promise For 2023?
Mr. Maguwu doubts the sincerity of the Mnangagwa administration in reaching the US$12 billion mining sector contribution to the economy by 2023. He further notes “Zimbabwe has far surpassed that mark.” Late Zimbabwe’s president Robert Mugabe in 2015 claimed the country had not received much from its diamond industry and lost about US$15 billion in the sector.
“We have not received much from the diamond industry at all. Not much by the way of earnings. I don’t think we have exceeded US$2 billion or so and yet we think that well over US$15 billion dollars have been earned in that area,” President Mugabe claimed then.
Zimbabwe is scheduled for general elections in 2023 and according to Mr. Maguwu, the government initiative in the mining sector is a campaign tool similar to the 2013 elections.
In 2010, Zimbabwe had an Employee and Community Share Ownership Scheme (ECSOS) in which foreign-owned companies were expected to cede some of their investments towards employee and community empowerment. After the 2013 elections, the scheme has been dumped.
“To me, it sounds like a political statement targeting the 2023 election, similar to the 2010 community share ownership scheme that was going to empower communities, and it led to the 2013 elections. After that election the whole thing died a natural death, now they are talking about a US$12 billion dollar economy by 2023, which is another election year. There is no feasibility study as to what is wrong with our mining sector. You cannot fix what you do not know. So there is no research carried out to say what is wrong and how do we correct it.”
“This government is silent on mining corruption. They are not talking about it and that is where the money is. It is not about making big statements and making promises to the nation,” Mr. Maguwu said.
Mines Minister Mr. Chitando dismissed critics for insinuating the US$12 billion dollar mining industry sector target by 2023 is a political campaign strategy. In his admission, he said Zimbabwe does not know the cumulative value of its mineral wealth. Credit: Gibson Nyikadzino / Ubuntu Times
Minister Chitando dismissed Mr. Maguwu’s assertion. He says the expected US$12 billion dollar contribution by the mining sector will be revenue streamed into the national fiscas.
“The US$12 billion dollars is the revenue that will be coming to the fiscas from the mining sector. There are projects happening now in the platinum sector, we have three new projects taking place. We have expansion projects taking place and all projects are taking place in reality. The fact that we took a five-year window is because that is the target we are working on,” explained Minister Chitando.
Uphold Rule Of Law To Plug Leakages, Illegality
Mr. Wellington Takavarasha, the chief executive officer of the Zimbabwe Miners Federation (ZMF), an organization owned by President Mnangagwa’s close relative Ms. Rushwaya, highlighted that artisanal small-scale miners contribution to the US$12 billion contribution is dwindling as some miners are being arrested.
Between 2017 and 2020, artisanal small-scale miners contributed a total of sixty tonnes of gold to the sanctioned government buyer, Fidelity Printers and Refiners. Because of arrests of the artisanal small-scale miners, gold output has declined from 60 percent to 47 percent. In 2019, small-scale miners contributed 17 tonnes as opposed to 9.8 tonnes in 2020.
“This year’s first quarter, our output has declined but we have the potential to contribute to the US$12 billion target. Our strategies include having our ventures formalized, mechanized, and have government resuscitate the mining industry loan fund,” said Mr. Takavarasha.
ZMF estimates that a tonne of gold is traded illicitly outside the formal market, which is fuelled by more than 1.3 million unregistered artisanal small-scale miners against its membership of 40,000.
Zimbabwe’s Gold Trade Act prohibits people without licenses to trade in the precious material. “Illegal mining is a livelihood activity that needs to be formalized. As it is, government is not benefiting but the middlemen and police are benefiting,” added Mr. Takavarasha.
Illegal gold dealings and smuggling is no new phenomenon in Zimbabwe. Successive ministers have raised the issue but their principals have turned a blind eye to their calls. Economist Mr. Nyasha Muchichwa says for government to stop the leakages, it needs to “uphold the rule of law and offer a competitive price to stop arbitrage.”
Government sanctioned buyer Fidelity Printers and Refiners is currently buying gold at US$45 per gram while on the illegal market it is US$54 per gram.
“The fact that we can quantify the money we are losing means we know that it is happening and when it has happened. The law should take its course and to those caught on the wrong side to be used as an example on what not to do.”
“When paying for those mining or selling gold, let us pay competitive rates so there is no arbitrage. As long as we have different prices this is when you find people making other means to get more money from the mineral they are holding. We need to address the price, laws that govern the selling, and the issue of our porous borders,” said Mr. Muchichwa.
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