The socio-economic development of African states is heavily dependent on how effectively governments are able to manage their natural resources. African states can derive greater benefit from the extraction of their natural resources and even develop sustainable legacies from their mineral wealth if the extractive industry is governed responsibly. In particular, African states need to ensure that the revenues collected are proportionate to the true value of the resources and are distributed equitably, ie, invested in social programmes that benefit communities. Transparency and accountability are central pillars in this process, acting as a check to common vices in the different extractive industries, such as illicit financial flows, tax evasion and corruption. Achieving transparency and accountability requires a mixture of regulatory initiatives and the acceptance of voluntary principles. Furthermore, the capacity of states to introduce the necessary reforms in their governance regimes can be bolstered through regional cooperation and a common strategy across Africa. This paper assesses the policy options available to African states to enhance the governance of their extractive industry, from the implementation of voluntary initiatives such as the Extractive Industries Transparency Initiative (EITI) to the adoption of government regulations at a national and regional level. The paper also considers the impact of multistakeholder governance on the management of the extractive industry and makes policy recommendations, aimed at achieving systemic reform, that are in line with the principles of transparency and accountability.
Author: Fola Adeleke