Regional Resource Governance in West Africa

Project description

Title: Regional resource governance in  West Africa
Commissioned by: Federal Ministry for Economic Cooperation and Development (BMZ), combined financing with the EU (Kimberley Process)
Country: Côte d’Ivoire, Guinea, Liberia, Sierra Leone
Lead executing agency: Ministries of Mines (Côte d’Ivoire, Guinea, Liberia, Sierra Leone)
Overall term: 2015 to 2018 (third phase)

© GIZ

Context

The raw material deposits in Liberia, Sierra Leone, Côte d'Ivoire and Guinea potentially present a major opportunity for these countries. In reality, however, natural resource wealth is often more of a curse than a blessing. It was not long ago that the battle over diamonds and other raw materials fuelled and financed the civil wars in the region. The exploitation of mineral resources like diamonds, iron ore, bauxite and gold still has a destabilising impact in the region today. The states struggle with institutional weaknesses and corruption while the social and environmental costs of raw material extraction engender dissatisfaction and conflict among the people. The possession of raw materials therefore remains a significant factor in the continuing fragility of the countries. The income from the extraction of mineral deposits falls short to benefit the population. The mining industry is not yet making a significant contribution to prosperity and sustainable development.

Objective

To arrive at a situation in which the countries are better at managing their raw materials sectors to the benefit of their population and are less dependent on foreign aid.

Approach

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH advises key players in the partner countries on how to achieve the more efficient and sustainable management of their natural resources by changing the political, economic and legislative framework. The spectrum of partner organisations includes government institutions at the regional, national and local level, civil society organisations and the private sector.
Strategic support is based on  the African Union’s mining strategy (Africa Mining Vision) and the respective national strategies for poverty reduction. The methodology behind the approach combines strengthening of the capacities of individuals, institutions and networks with expert input and policy advice.

There are four operational fields of activity:

  • strengthening of state regulatory bodies to better enforce fiscal and social standards in the mining sector.
  • support of civil society organisations to enable them to engage more effectively in political reform processes in the mining sector.
  • promotion of cooperation between the administrative authorities, the private sector and the population for local development and conflict prevention in mining areas.
  • Improvement of the exchange of information and practical experience at regional level. The focus here is on establishing a regional action plan to curb the illegal trade in conflict diamonds (Kimberley Process, in cooperation with the European Union).

Results

With the support of the project, our partners have achieved the following results and successful outcomes since 2009:

  • Sierra Leone and Liberia have set up an electronic system for the management of mining licences.
  • Audits in Liberia have so far led to claims for back taxes and charges of approximately USD 21 million. In addition, the project currently trains key players in Côte d'Ivoire, Guinea and Liberia in fiscal modelling of industrial mining projects. For example, it was possible to reliably quantify the tax relief granted for the Yaouré gold mine in Côte d’Ivoire for the first time (USD 110 million).
  • A digital platform was set up in 2017 in Guinea to share data on production, exports and tax revenue from the mining sector with a view to enabling mining, financial and customs authorities to retrieve information in real time. The automated data exchange in Guinea already revealed that only about one third of the mining companies entered in the land register are also known to the tax authorities.
  • In Liberia and Sierra Leone, some 70,000 residents of mining areas affected by conflict participated in the preparation of local development plans. In Liberia these plans generated USD 150,000 in additional funds for the development of local structures.
  • Within the framework of a participatory consultation process, a binding nationwide standard for local development plans in mining regions was established in Côte d’Ivoire.
  • In Guinea, small scale miners are currently being trained in environmentally friendly and socially responsible mining practices with a view to reducing the damage caused to the environment and the hazards posed to health by the use of mercury in gold mining.
  • Needs assessments and advocacy training courses have been conducted with women in eight mining communities in Sierra Leone to date in order to enable them to better represent their interests in the distribution of local mining revenues.
  • The regional action plan of the four member countries of the Mano River Union for the implementation of the Kimberley Process for diamond certification is supported in various ways, such as by training a generation with the necessary skills to assess the value of diamonds.