Situation
Resource-rich countries in Africa and elsewhere often enter contracts with third parties to govern mining, oil and gas projects. Given that the value of Africa’s subsoil assets far exceeds the cost of the continent’s robust development aspirations, revenues from the extraction of these resources must provide the maximum possible benefit to assist in realising these development goals.
Despite the critical importance of extractive industries in Africa, many African parliamentarians need technical help evaluating the merits of negotiated contracts. This can be due to absence of information or expertise, lack of preparedness, power imbalances, and other factors. Similarly, although African civil society organisations (CSOs) working in natural resource governance are keen to engage with governments and multinational enterprises in assessing extractive industry contracts, they too need to gain the skills to champion the position of developing countries effectively.
ILP’s Action
ILP and Tax Justice Network Africa developed an Extractives Industry Toolkit, which serves as a simple guide for Members of Parliament and CSOs when assessing extractive industry contracts. The Toolkit provides crucial advice on the fiscal aspects of such contracts and highlights critical entry points for policymaking and dialogue. The Toolkit was presented and adopted at the African Parliamentary Network on Illicit Financial Flows and Tax (APNIFFT) 2023 Continental Conference, which brought together MPs from across the continent who are keen on building their capacities in tackling illicit financial flows and promoting tax injustice in Africa.
Impact
MPs responsible for negotiating and entering extractive industry contracts will gain a deeper understanding of the pertinent issues to consider, enabling them to better negotiate contracts that protect and increase their countries’ tax and revenues base. CSOs in natural resource governance who use the guide will be better equipped to hold governments accountable. The project will assist with the development of well-founded extractive industry policy in Africa.