Strengthening resource governance in the extractive sector
Project description
Title: Strengthening good governance in the extractive sector, Mali
Commissioned by: Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Mali
Lead executing agency: Ministère des Mines et du Pétrole (Ministry of Mines and Oil)
Overall term: 2017 to 2019
Context
Mali’s extractive sector makes an important contribution to the country’s economy. Gold is Mali’s main export, accounting for 70 per cent of export earnings and almost 30 per cent of tax revenue. To better tap the potential offered by gold, the government has implemented radical reforms, including a revision of Mali’s Mining Law. This is designed to raise income and make a sustainable contribution to socially equitable economic growth. Efforts to date are, however, insufficient in view of the numerous challenges the country faces, for example, in creating a structure that is efficient, effective, transparent and participatory. Above all, civil society plays too small a role. In addition to this, the inspection and control bodies are too weak.
Objective
The provisions related to transparency and control contained in the Africa Mining Vision have been implemented. The conditions for using Mali’s mineral resources to support the country’s long-term development have improved.
Approach
To date the project has strengthened the contribution of the extractive sector to sustainable development in Mali. Notably, state revenue has been increased, thanks to the creation of an administrative system for the mining cadastre. Training for key stakeholders in the extractive/mining sector has helped develop a better understanding of administrative structures. In addition to this, civil society has been involved in various political reform processes under the Extractive Industries Transparency Initiative (EITI).The project has trained decision-makers in five municipalities, which has strengthened their knowledge and skills and enabled them to set up a public accountability system.
The project hopes to consolidate and pursue this kind of activity to help professionalise the extractive sector. For example, the government is to extend taxation and strengthen monitoring and control structures. The project is continuing to give civil society a stronger role in reform processes. Developments in the extractive sector will be entered into a database. The project also aims to increase the local value added and to enhance accountability.
The number of tax assessment cases coming before the courts is to be reduced from 80 to 25 per cent. To achieve this, the project is to train at least 20 tax inspectors. The project is also helping the EITI to develop a communications strategy.
Results
The percentage of uncollected taxes and levies has been reduced from 75 to 25 per cent.
A publicly accessible information system has made the granting of mining permits in Mali more transparent. Processing times have been reduced from eleven to no more than three months.
This increased tax revenue from 7.6 million euros in 2016 to 38 million euros in 2018.
Economic, social and cultural development plans have been drawn up by 11 municipalities and more than 5,000 citizens have been involved in the process.
Greater transparency has boosted public trust in the government.
In cooperation with partner organisations, the project conducted a study of mining activities in the Kayes region. The results were used in workshops to raise public awareness of the impact of mining.
In collaboration with the private sector and civil society, the Ministry of Mines has drawn up a strategy paper on extractive sector policy. Implementation of the policy should increase economic growth in the long term and consequently promote stability and peace in Mali.