Maravi

US doesn’t condone corruption in mining sector - Clinton

US doesn’t condone corruption in mining sector - Clinton
By Mutale Kapekele and Gift Chanda
Sun 12 June 2011, 08:14 CAT

VISITING US Secretary of State Hillary Clinton says her country has introduced a law that will compel companies that raise capital from US markets to provide evidence of how much mineral royalty they are paying the host governments.

Zambia is one of the mineral-rich African countries that gets little or no royalties from most of the mining companies with last year attracting less than three per cent of tax revenue from US$7.2 billion mining exports.

During the closing ceremony of the 10th African Growth and Opportunity Act (AGOA) forum that Zambia hosted from June 8 to 10, Clinton said her government did not condone corruption in the mining sector.

“Corruption exacts a real toll (on economies). Every bribe paid to a custom official represents a hidden tax on the cost of doing business and a drag on economic growth,” Clinton said. “The (US) State Department is elevating corruption as a major focus of our diplomatic effort.

We are establishing an innovation fund to create incentives and boost political support for anti corruption efforts. And the US now requires oil, gas and mining companies that raise capital in our markets to disclose the royalties they pay to foreign governments, which will help ensure that Africa’s natural wealth benefit the people rather than corrupt officials.”

She encouraged African countries to improve their business climates adding that a business was only as successful as the environment in which it operated.

[The question is - whose business? Transnational corporations or local SMEs? - MrK]

“Buyers and sellers can’t do business if they are harassed by corrupt officials,” she said. “A strong economy requires a supportive business climate that empowers every entrepreneur to do her very best. It starts with confronting poor infrastructure – roads, ports, and electric grid that drive up the cost of doing business.”

She urged AGOA eligible countries business people to create networks with US counterparts in order to fully benefit from the initiative, the brain child of her husband Bill Clinton.

Clinton also announced a US$2 million assistance to African Women Entrepreneurs Programme (AWEP), whose headquarters will be housed in Lusaka.

She also promised the 37 AGOA eligible countries that the US government would engage congress to look at the possibility of extending the preference law for unspecified timeframe.

Earlier, commerce minister Felix Mutati said AGOA must translate into a practical reality, which translates into pay cheques in the pockets of participating businesses.

He said the preference law should not be politicized and he called on AGOA eligible countries to trade more with each other.

He said going forward; Africa needed to attract more US investments through an incentive structure offered by the American government.

He also said as part of progress, the Millennium Challenge Corporation should shift from being country focused to embrace a regional approach. Mutati also told the US to simplify procedures by addressing stringent standards tests.

And in a communiqué of AGOA ministerial consultative group meeting, the 37 member countries have chosen Ethiopia and Cameroon as hosts of the next forums to be held on the continent in 2013 and 2015 respectively.

Labels: AGOA, FELIX MUTATI, HILLARY CLINTON, MINING, TAX EVASION, TAXATION

posted by MrK @ 3:49 PM