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Monday, 21 January 2013

Is the Extractive Industries Transparency Initiative Relevant for Reducing Diversions of Public Revenue? The Mozambican Experience

  Rogério Ossemane
SAIIA Policy Briefing No 61, January 2013

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Governance of Africa's Resources Programme

The Extractive Industries Transparency Initiative in Mozambique (MEITI or EITI) is largely irrelevant in preventing diversions of public funds. In Mozambique, these diversions occur on a much greater scale at stages where both the companies (and their foreign and national shareholders) and individuals linked to government power can take advantage of a lack of transparency, rather than at the stage monitored by the MEITI, where only the latter can take advantage. The briefing shows that most funds are diverted earlier – during the negotiation of the fiscal regime and declaration of the tax base. These are phases that are shrouded in a high and unjustified level of secrecy. This allows large-scale private appropriation of the rents generated in the sector and the payment of derisory sums to the state. In addition, the fact that these diversions occur so early on leaves little to be gained from diversion at the stage covered by the MEITI.

Author: Rogério Ossemane