The Government's move to reform mining legislation is commendable, but a lot more still needs to be done to improve the business and investment climate.

According to Energy and Minerals minerals minister William Ngeleja, the proposed amendments to the Mining Act 1998, should be tabled in the next parliamentary session in October. The aim, among other things, is to set new rates for royalties, and allow the Government to hold at least 15 per cent stake in each mining company.

This initiative is a step in the right direction. It is a common practice for governments in Africa to have partial ownership of mining companies to ensure that this vital sector yields the fruits for the nation.

Advice from multilateral institutions that governments should stay completely out of businesses has been proven untenable, especially in strategic areas of the economy.

If anything, the current global economic crisis is the best proof that the private sector should not be left entirely to drive the economy alone.However, it will take more than just increasing royalties or acquiring partial ownership in mining companies for the country to benefit fully more from investments in its potentially vast natural resources.

There is a limit as to what cash benefits the Government can extract from such investments, which are capital intensive. And moreover with weak accountability in the public sector, it is difficult to ensure that government revenues are effectively harnessed.

The greatest benefit the country can obtain from big investments such as those in mining is to ensure the creation of the best environment for the exploitation and management of those resources. There is, for instance, dire need of quality infrastructure, and the reduction of bureaucracy and corruption.

An improved investment climate will boost the growth of the local private sector, which will, in turn, provide backward and forward linkages with the foreign capital. Every effort must go into improving improve educational facilities as a basis for the nurturing of a skilled, and vibrant workforce.

Such a group will be able to take advantage of employment opportunities created by foreign investments. Besides cash returns, the emergence of a skilled and competent labour force will be the lasting legacy from foreign investment in mining and other sectors.