sharing in governance of extractive industries
The Regional Resource Governance in West Africa (ReGo) project, funded by the German Federal Ministry of Economic Cooperation and Development (BMZ) and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), hosted a regional exchange event on mining taxation in collaboration with the Overseas Development Institute (ODI) in Abidjan from 12th through 13th September. The event gathered practitioners from both revenue and mining administrations from nine, mainly West-African countries, as well as experts from the World Bank, the Illicit Financial Flows Working Group (IWG), the Revenue Development Foundation (RDF) and African Development Bank (AfDB) to discuss common challenges in mining taxation and share experiences and practices in addressing them.
Despite their enormous resource wealth, countries in West-Africa struggle to mobilize revenue from the mining sector. Lack of information, weak legal frameworks and administrative systems prevent governments from collecting their fair share.
To address these challenges, the GIZ-ReGo project in collaboration with ODI have been providing on-the-job support on tax audits, and technical advice on inter-institutional collaboration and tax reform in Liberia, Sierra Leone, Côte d‘Ivoire and Guinea for several years.
Over time, exchange of experiences among the partner countries has gained in importance and has led to the idea of gathering best practices and lessons-learned in a joint publication and organizing this regional exchange event which brought together not only GIZ-ReGo/ODI partner countries, but also practitioners from Burkina Faso, Mali, Togo, Niger and Tanzania.
One of the main take-aways of the event was that regional collaboration is a powerful tool to boost revenue collection. According to the Director General of the General Tax Directorate of Burkina Faso, the presence of strong regional organizations, such as the West African Economic and Monetary Union (WAEMU) and Economic Community of West African States (ECOWAS), paired with the fact that the same mining companies often operate across several West African countries, provides many opportunities for countries to exchange data, harmonize legislation and avoid harmful tax competition.
On a national level, participants agreed that countries have a lot to gain from cooperation and data exchange between mining and revenue administrations. However, as one participant noted “there is often a tendency for institutions to think that they increase their importance by operating like an island, while the opposite is true”. Several solutions to foster collaboration were discussed during the sessions such as the Mining Revenue Task Force in Liberia and the “Infocentre”, a data exchange platform in Burkina Faso. However, some participants acknowledged that these solutions will require strong political positioning of the respective governments in favour of inter-institutional collaboration.
With the aim of providing a platform for participants to exchange their day-to-day experiences and practical solutions to common challenges, the event also featured panels on issues such as access to third party data and advance pricing agreements.
Following this event, the next challenge will be to put words into action. A first step could be for participating countries to start collaborating on concrete issues, e.g. by conducting joint audits and exchanging information on common taxpayers. Repeating such an event could also provide an opportunity for countries to agree on practical solutions to work together more.
“We would like this type of event to take place more regularly in the interest of our states. At the same time, we hope that each of you will speak out for these exchanges and the experience you have gained during these two days of work, in order to make inter-institutional and regional cooperation stronger and more effective,” concluded the Director General of Mines and Geology of the Ivorian Ministry of Mines and Geology during his closing speech.
Photo title: Picture of participants at the end of the second day of the regional exchange event. Copyrights : GIZ-ReGo
Author: Stefanie Heerwig (GIZ-ReGo), Gundula Löffler (ODI)
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