Extractives,Tax & Africa’s Development

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John GBENAGNON, Assistant of the Director of the Francophonie Numerique (OIF)

FEMNET MemberGlobal Youth Ambassador – UN GEFI – A World At School

Case of BeninITJA 2015

Official Name: Republic of BeninType of State: RepublicArea: 114 763 km²Density: 60 inhabitants / km2.Currency: CFANational Day: August 1Human Development Index (IDH 2011): 0.427 (167 °)

Population: 10,160,556 (July 2014)

• Scanning the area showed indications of existence of deposits of gold, iron, uranium, tin, and phosphates in the north of the country, and research is ongoing. Several oil exploration permits have been signed

• A deepwater field of more than 300 million barrels of reserve.

The Mo-Ibrahim Index of African Governance (IIAG) of the Mo Ibrahim Foundation that it simply Benin ranks first in the UEMOA area.• The Question is How can we use the Extractive to Develop Benin Economic?

« Africa is a continent blessed with natural wealth but the

majority of people remain poor and the extraction of its mineral

wealth has done nothing for ordinary people »

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Can We Break The Curse?

INTRODUCTION

The continent’s abundant extractive resources can be a key

source of revenue for the continent’s transformation

agenda.

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Recent discoveries of iron, oil, gas, gold and coal have been made located in Guinea, Ghana, Liberia, Tanzania and Mozambique

Over 80% of the world’s total future pipeline of mining projects is based on four key minerals: iron ore, copper, gold and nickel, which are all present in Africa.

Africa’s mining sector accounts for just 10% of the world’s production.

THEMATIC

Many of Africa’s richest resource countries rank

amongst the lowest on the Human Development Index.

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WHY?

The Paradox

For Instance, Angola has one of the world’s highest maternal mortality rates, Equatorial Guinea is one of the countries with the highest child mortality rates, and the Democratic Republic of the Congo lurks at the bottom of the index on almost all fronts.  The largest exporter of uranium, Niger, trails the index.

PROBLEMATIC

• The poor performance in mineral rich economies has been linked to differing factors: weak integration of Africa’s extractive sector into

national socio-economic activities; commodity exports with little or no value added; and weak forward and backward linkages to the rest of the

economy.

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• Agreements between governments and private investors are often unsatisfactory with regard to the government revenues because of power imbalances. There is also a lack of revenue management and of good investment conditions, such as a functioning infrastructure.• According to a landmark report, released earlier this year by the African Union’s high-level panel on illicit financial flows and the United Nations Economic Commission for Africa (UNECA), Africa loses over US$50 billion annually to illicit financial flows, mostly through the extractive industry.

EXTRACTIVE INDUSTRIES IN AFRICA = EXTRACTED PROFITS

• weak capacities to monitor compliance with mining contracts and verify production amounts, exports, and global prices

AFRICA’S UNDERDEVELOPMENT CAUSES

• Transparency is one of the first cornerstones. Good investment conditions, sound taxation systems, effective tax collection, better deals with private investors and

optimised revenue management are necessary complements. Social and environmental standards must be further key elements if the sector is to be made

part of the sustainable development of sub-Saharan African countries.

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• African governments should start with a strengthened focus on fiscal policy and equitable public spending on infrastructure, health, education, water and sanitation.

SIGN THE PETITION AND INVITE POLICY MAKERS, GOVERNMENT

ACTORS, MEMBERS OF CIVIL SOCIETY AND BUSINESS WORKERS

TO JOIN THE MOVEMENT

http://stopthebleedingafrica.org/

APPROACHES

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It will take presence of strong, accountable and democratic governments, the mechanisms to prevent illicit and

fraudulent financial transfers, and continued advocacy and campaign work of trade union, community and civil society groups to really affect socio-economic and environmental

change in Africa’s mining industry.