THE ruling Swapo party says it wants to resuscitate the Minerals Development Fund (MDF) once it is elected back into power.
The fund, established in 1996 to provide loans for emerging small-scale miners, has been dead since about 2012. It also has a ghost of nearly N$120 million that remains unaccounted for. The ruling party states in its election manifesto, under the mining section, that it aims to revive the now defunct fund.
Mines and energy minister Tom Alweendo, however, insists the money was not stolen.
In the manifesto, Swapo claims that it will revive the fund to provide financial support to small-scale miners, claim holders and exclusive prospecting license (EPL) holders, including support to obtain debt underwritten by government guarantees where possible and through other facilities.
This comes over a decade after the fund was shut down, with the auditor general asking questions about the manner in which the fund was run.
The fund was established by an Act of Parliament in 1996, and its aim was to assist small-scale miners with financing their equipment and start-up capital. The initial funding came from the European Union.
By the time it became defunct, the fund was owed N$115 million by beneficiaries, and it appears no effort has been made to recover such money. The Auditor General in 2012 also pointed out that the fund had a poor repayment record on loans.
In 2012, the Office of the Auditor General further asked questions about a N$3.6 million that has not been accounted for. Although it is a legal requirement for a body of that nature, established by an Act of Parliament, to provide audited financial statements as well as on its operations on a yearly basis. It is not clear what happened to the loan beneficiaries or whether the mines ministry took any measures to recover the money.
“It is not that the money is stolen,” said mines minister Tom Alweendo who explained that the fund is still in existence but was just inactive due to financial constraints. He told The Issue last month that the fund still had about N$5 million left.
He said it became inactive because it has not received funding for over 15 years. He added that the MDF enabling act makes provision for the government to pump money into it, but the Treasury never injected any funds into the fund.
Alweendo said the money was paid as loans to mining projects that were still in the exploration phase. This was a costly mistake, he points out.
“You cannot fund mining with loans; you can only fund mining with equity,” he said, adding that mining is a volatile industry and too risky.
Alweendo said the fund can still be used for capacity-building purposes and that small-scale miners remain a priority for the ministry.
The ruling party’s election manifesto stated that apart from reviving the MDF, it will also focus on ensuring a conducive policy environment to facilitate investments, capitalising on positive price developments to revive uranium exploration, and exploring new gold mines.
It also intends on constructing a mineral beneficiation strategy for critical minerals and providing financial and legislative support to state-owned Epangelo mining.