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Maximizing revenue from extractive industry - Crown Agents workshop in Liberia

All,

Last month, Crown Agents facilitated a workshop in Monrovia in co-operation with Liberia's Ministry of Finance. Entitled 'Maxmizing revenue from extractive industry: Getting it right from the start'.

 

Underlying the workshop was a focus on how the maximization of revenue from extractive industries required the establishment of appropriate policies, institutions and capacity as early as possible (i.e. right from the start). Once large mining and petroleum projects are operational, it is very difficult for authorities to catch up. This can be illustrated by comparing the benefits from establishing a complete fiscal regime for extractive industries in anticipation of commercial activity, as opposed to ad hoc contract negotiations which often require renegotiations at later dates, resulting in investor uncertainty and administrative complexity.

 

The establishment of appropriate government institutions was another issue discussed. This included revenue authorities, such as the Liberian Revenue Authority (which is to be launched in July 2014), as well as regulatory agencies such as Sierra Leone’s National Minerals Agency (which was established in January 2013). Such institutions should be established and made effective as early as possible in order for a country to maximize revenues from extractive industries. Both experiences were discussed via a combination of presentations followed by expert panel discussions and question and answer sessions.

 

In a session on how revenue authorities could prepare themselves for extractive industries, current preparations within Liberia were discussed alongside international experiences. An AusAid adviser presented on the introduction of a Natural Resources Tax Unit in Liberia, whilst Alan Carter (International Tax Dialogue) presented a more general theoretical overview of how revenue authorities could prepare themselves for extractive industries.

 

A similar session focused on how the institutions regulating the mining sector could achieve their objectives, with presentations from Sierra Leone’s new National Minerals Agency, as well as Liberia’s Ministry of Lands, Mines and Energy. Other sessions included a presentation from the UNDP on lessons which West Africa could learn from Zambia’s experiences with its mining industry, as well as presentations from Liberia and Ghana on the taxation of extractive industries in those counties.

 

Crown Agents consultants also contributed presentations, namely:

  • Steve Macey ran a session on ‘Mining revenue forecasting’, focusing on the importance of such forecasts to macro-fiscal planning and the need to develop them in advance. Steve also presented on the ‘Extractive Industries Revenue Taskforce’, which he led whilst in Sierra Leone’s Ministry of Finance from 2010 to 2012.
  • Julian Adey presented Crown Agents experience in the establishment of new revenue authorities in the first main session of the workshop.
  • Mike Canvin then discussed how the principles behind OECD’s Right from the start initiative could be applied to extractive industries.

 

Guardian report

http://www.theguardian.com/global-development-professionals-network...

Linkedin group

http://www.linkedin.com/groups?gid=7422277&trk=my_groups-b-grp-v

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