Rédaction Africa Links 24 with lexpress
Published on 2024-03-07 02:45:00
The context is difficult for the extractive sector in Madagascar and internationally. However, the reforms implemented in this sector are bearing fruit.
The revival of the mining sector is still in its early stages. However, despite a difficult economic situation, especially for the country’s large extractive industries, some reforms implemented in this sector are starting to bear fruit.
Referring to the figures provided by the Ministry of Mines, the value of declared mining exports has significantly increased for 2023. It amounts to 6,033 billion ariary. The foreign exchange repatriation rate has also followed suit with a total of 81.43%. While these figures may seem insignificant on their own, they play a significant role in balancing trade and the foreign exchange market. Especially in the context of a floating economy where several factors play a decisive role. It must be said, this is a step in the right direction, in a context where the country is relying on the cleaning up and leveraging of the mining sector for country’s development. Olivier Herindrainy Rakotomalala, Minister of Mines, emphasized the importance of the reforms undertaken to revive the mining sector during his intervention on Tuesday on national television.
Taking the example of the gold sector where legal exports have just resumed, he confirms that gold is a valuable resource. “Currently, the ounce, that is 31.1 grams of refined gold, following the requirements of the London Bullion Market Association, is worth $2,080, or $66 per gram. This means that if we produce a ton of refined gold, it would be worth around $66 million. If foreign exchange repatriation is effective and if we produce a similar quantity in a month, this foreign exchange will help rebalance the country’s trade balance,” he said.
**Formalization**
Certainly, it would not be fair to bet on the winning horse in the race for development, it is also about ensuring a future for the country’s mining potential. It should be noted that the country’s trade balance, “traditionally in deficit” according to some economists, recorded a deficit of $870 million in 2022. “If the State’s objectives are achieved, in particular that of exporting fifteen tons of gold per year, gold alone could rebalance the country’s trade balance,” says Olivier Rakotomalala.
The reforms being implemented, in addition to the overhaul of the mining code, are numerous. These include measures to clean up and support mining operators as well as formalizing mining activities. The revision of the law on large mining investments (LGIM) is also expected this year if we follow the logic and recommendations of institutions such as the International Monetary Fund which supported during the fourth review of the Extended Credit Facility (ECF) that “the 2005 law on large mining investments, which established a special regime for large mining operations, should be revised in accordance with the new mining code.”
*Itamara Randriamamonjy*
Read the original article(French) on lexpress.mg
