EAST African Development Bank (EADB) has asked public sector lawyers in East Africa to avoid undue influence and consider public interest when negotiating contracts with investors in the natural resources sector.
The EADB Director General, Vivienne Yeda said in Dar es Salaam yesterday that the discovery and ongoing exploration of various minerals in the region has raised the expectation of host communities and governments that resource extraction will result into wealth creation, reduced budget deficit and improve the conditions of the local people.
“It is critical that host countries are able to derive tangible benefits from the exploitation of their natural resources,” she said at a seminar to public sector lawyers and Law Professors.
She said the benefits should reach the local communities in form of appropriate royalties, taxes, dividends, business opportunities, professional jobs and employment for skilled labour.
Ms Yeda noted further that there should be a clear benefit to the country, commensurate with the amount of resources derived for the country.
In order to achieve this, taxes and other fiscal rates, environmental and social management in Africa should be comparable to those prevailing in advanced economies and should comprise best practice, such as stabilisation clauses, which may be used in very specific and clearly defined circumstances and for a limited duration only.
“Africa should adopt dynamic and creative fiscal regimes that can be adapted to changing economic and social circumstances.
It is a continuing puzzle and challenge that there is a negligible number of African owned companies in the natural resources sector more than 100 years after resources such as gold and diamonds were discovered,” she added.
The training seminar is organised by EADB and facilitated by global law firm, DLA Piper. It is designed for public sector lawyers and law professors involved in negotiating transactions and drafting agreements for on behalf of governments in extractive sectors and other large-scale projects and is the sixth to be held in the region, after the inaugural one held in Kigali, Rwanda.
The Dar es Salaam seminar that will be running throughout the week will bring together senior public-sector Lawyers and Judges from Tanzania, Kenya and Uganda, and will be conducted by global law firm, DLA Piper.
The agreements discussed at the seminar include Exploration Agreements, Project Finance Agreements, Production licence and Production Sharing Agreements and multi-contracting Agreements.