Call to formalize artisanal mining sector
A debt-monitoring organisation has implored the Government to formalise the artisanal mining sector to maximise its revenue.
The Zimbabwe Coalition on Debt and Development (ZIMCODD) urged the government to put measures that will see artisanal miners being accountable for their operations as currently they are working in an informal environment.
The coalition said above half of gold being produced in the country is coming from the informal sector; hence, there is need to regulate the sector.
“65% of earnings from the gold sector in Zimbabwe are from artisanal miners, but they are informal and operate on a ‘no-questions asked’ basis. There is need for formalization.
Enhancing transparency and accountability around mineral revenues: The example from Chile is useful where the Government adopted a Transparency and Access to Public Information Law for all public agencies. In terms of reporting the Finance Ministry regularly publishes information on production volumes, prices, mineral export values, royalties and special taxes and audited financial statements and annual reports are regularly published,” said ZIMCODD, in a statement released after a recent webnar.
The webnar was on “decent work and informality”.
The organisation recommended synergies between the informal miners and reputable corporates.
“An example of formalization would entail linking artisanal miners to established mining houses as was done in Chile where the government set up the Empresa Nacional de Mineria (ENAMI), (the sixth largest copper exporter in Chile), whose Board of Directors is made up of the Minister of Mining, a representative of the Minister of Finance, a representative of the President, a representative of COCHILCO, the copper advisory agency and SONAMI, an industry association comprising small, medium-sized and large copper producers, with a mission of providing technical, financial, and metallurgical production and trading services that ASM miners require in order to be competitive.
“Given the multi-faced and multi-layered interventions and actors operating at the national, sectorial and local levels, an effective institutional coordination framework is required if such interventions are to have national impact. An example is the establishment of the Capacity Development and Employment Services Board (CESB) in Rwanda where the National Capacity Building Programme, Employment Services and LMIS were merged,” the statement said.
According to a paper done by the Labour Economic Development Research Institute Zimbabwe (LEDRIZ), there are several ways of formalising the informal sector.
“Conferring to LEDRIZ’S participation in the informal economy; it is necessitated by a need to access to basic income-generating activities as a means of survival rather by choice. There are a number of methods to which the informal economy can be formalized and these can take various forms, which include registration, taxation, organisation and representation, legal and social protection, business incentives and support. Benefits of formalizing informal operations includes; creation of a broader tax base that may allow lower rates, possibly increases investment and strengthens the social contract/rule of law. Formalization also leads to access to finance and market information, thereby enabling improvements in the productivity of informal units. Increased productivity means better incomes,” LEDRIZ said in its paper.