SEATINI Uganda and Partners Hold Multi-Stakeholder Meeting on Africa Mining Vision

On 11th May 2021, SEATINI Uganda with support from Diakonia and in collaboration with the Civil Society Coalition on Oil and Gas (CSCO), Publish What You Pay (PWYP), Stop the Bleeding Campaign, and Transparency International Uganda (TIU) held a multi-stakeholder meeting to analyse the legal framework in the mining sector in line with the Africa Mining Vision (AMV). The objective of the meeting was to gauge the extent at which the country’s resource governance reforms have been aligned with the AMV.

A draft country mining vision assessment report with a particular emphasis on fiscal linkages was presented during the meeting. This along with other key policy and legislative reforms in the mining sector would offer an opportunity for stakeholders to take stock of the country’s reform agenda in line with aspirations of the AMV.

Jane Nalunga, the Executive Director at SEATINI Uganda, in her opening remarks, noted that Africa in general and Uganda as a country have been largely endowed with mineral resources that could be relied upon to drive social economic development. However, resource mismanagement that has taken the form of corruption, unnecessary tax incentives, Illicit Financial Flows (IFFs) among others have remained key barriers to the country’s ability to reap substantial gains from her mineral sector. She therefore stressed that the meeting was aimed at interrogating the country’s resource governance reforms.

While presenting the draft Country Mining Vision Assessment report, Dr. Dan Ngabirano, a lecturer on Law at Makerere University and Partner at Development Law Associates, began by providing some background on Uganda’s extractives sector noting that the mining sector’s contribution to GDP had shrank over the years from 30 percent of GDP in the 1960’s to now 1.5 percent of GDP. He went on to note that Gold was now Uganda’s leading export after having over taken coffee.

Regarding the extractives industry fiscal regime, Dr. Ngabirano stated that these are a set of instruments that determine how revenues from oil and mining projects are shared between the state and the companies. An effective fiscal regime ensures revenue maximization for the state while at the same time encouraging investment. He noted that Uganda’s fiscal regime provides for a Corporate Income Tax rate of 30 percent and the same rate for Capital Gains Tax. Dr. Ngabirano noted that generally there is a uniform tax system but however challenges such as political interference and IFFs still persist. The fiscal regime is also supportive of investment into the minerals sector as it provides for several incentives such as 100 percent depreciation of mining costs; carrying forward of losses; VAT exemptions on supplies among others.

However, with regards to fiscal administration, Dr. Ngabirano indicated there are several gaps for example in FY 2015/16, two mining companies were found in default of UGX 691 million; annual concession fees of USD 1.7m for Kilembe had not been paid; unpaid mineral rents amounting to UGX 22.9m. He also mentioned that there was a huge and unregulated artisanal and small scale miners sector.

During his presentation, the Interim Coordinator, Africa Minerals Development Centre (AMDC), Mugyenyi Frank revealed that the Africa Mining Vision was adopted in 2009 and since then, a lot has happened in the Minerals Sector. He also noted that the African Union Commission together with partners is reviewing the AMV Action Plan to bring it in line with the recent developments.

Mr. Mugyenyi also thanked SEATINI Uganda and partners for making it possible for stakeholders to deliberate on the Africa Mining Vision considering that having a stakeholder forum is one of the key elements for the Country Mining Vision development.

In Conclusion, Dr. Ngabirano stated that it has taken Uganda over 10 years to align her laws to the AMV and thus called for the expedition of the enactment of the Mining and Mineral’s Bill 2019; an embankment on the country mining vision process; publishing of all past, current & future resource agreements without any delay; renegotiations of unfavorable DTAs among others.

Following this meeting, a CSO analysis will be developed to inform ongoing processes around the enactment of the Mining and Mineral Bill 2019 which is currently under review. This will contribute to ensuring that there is inclusive, accountable and prudent revenue mobilization and management of from the mining sector in Uganda.