Former Prime Minister Raila Odinga roots for uniform laws for Africa’s minerals

Updated Sunday, July 14th 2013 at 15:47 GMT +3

By Standard Digital Reporter

NAIROBI, KENYA: Former Prime Minister Raila Odinga has called on African countries with minerals to come up with uniform laws that will ensure multinationals in the mining sector do not deny the Continent revenue through tax evasion

Mr Odinga said producers of minerals in Africa lose billions of dollars a year in much-needed tax revenue because of lack of clear and strict laws that are applied uniformly by all mineral rich nations.

Addressing a forum on Opportunities and Innovation during the Australia- Africa Dialogue organized by Australia Strategic Policy Institute in Bunker Bay, Australia, Mr Odinga said the problem of tax avoidance by multinationals is complicated by smuggling which has reduced the continent’s earnings from its mineral wealth.

He said that some of Africa’s mining giants lose up to $2 billion a year through corporate tax avoidance; an amount he said is more than what the countries spend every year on social programs like health andeducation combined.

He called on African countries to adopt the Extractive Industries Transparency Initiative (EITI), which sets a global standard for transparency in oil, gas and mining, adding that only realistic and not punitive laws will attract investors.

“Improving transparency and accountability in the extractives sector, will ensure that all stakeholders especially communities living in mining areas benefit,” Mr Odinga said.

“As things stand now, millions of people live in countries rich in oil, gas and minerals. But the exploitation of these resources has not generated large enough revenues to foster growth and reduce poverty,” he said.

He said clear laws governing the minerals sector is particularly critical to Kenya where more oil deposits are being discovered alongside numerous other precious minerals.

“When governance is weak, the discovery of oil and others may only result in more poverty, corruption, and conflict,” he said.

He said Kenya is currently formulating new legislation to govern mining sector adding the laws will ensure that the interests of players in the mining industry are addressed and all stakeholders reap benefits.

But he appealed for a united front, saying unilateral action by individual countries could lead to a confused, fragmented set of rules with no clear standards.