DFID Work on Extractive Industry Reforms in Africa
Slide 1
Overview of DFID’s extractives work in Africa
• All of DFID’s bilateral programmes in Africa
are currently working or planning to engage
with extractive industries
• DFID has operational projects in 5 countries
(dark green)
• Scoping studies or project design for work
on extractive industries are being carried out
in a further 3 countries (medium green)
• 9 countries have expressed interest in
working on this agenda (light green).
Most African countries are underexplored – for example only 2% of Ethiopia’s
subsoil has been surveyed and even Zambia with its mature mining industry
remains 60% unexplored. Paul Collier estimates that future discoveries and
Slide
2
resulting
exports in Africa will be around five times their current level.
Democratic Republic of Congo (DRC)
Unparalleled mineral wealth: 50% of the world’s
cobalt, 25% of industrial diamonds, 5% of
copper… BUT fuelling conflict and corruption,
not development.
Tax collection from gold in Eastern DRC
Renewed interest from multinational investors,
international initiatives against conflict minerals,
and participation in EITI may offer opportunities
for change
Together with the World Bank we are investing in mining sector reform
(£28 million DFID contribution)
Difficult conditions slow down progress, but we have secured continuation of EITI
process on two occasions and are helping directly with contract transparency
Immediate focus will be on conflict minerals in Eastern DRC and partnership
with responsible mining companies in Katanga Province
Slide 3
Ghana
Already a major gold producer, Ghana started oil
production in 2012; revenues from the first phase
could amount to US$850 million
DFID Ghana is developing two new programmes to
(a) bring together communities, government and
industry in oil producing areas and (b) support state
institutions responsible for revenue collection,
management and allocation
DFID Ghana’s STAR programme has just awarded
$2million in grants to 13 civil society and 7
community-based organisations to strengthen
transparency and accountability in the oil sector
Slide 4
Mozambique
Already rich in coal, offshore gas
revenues could bring billions of
US$s in additional revenues
DFID is designing a new
technical assistance
programme with the World
Bank ($10 million DFID
contribution) to address critical
reform priorities in the mining
and gas sectors
Coal in Mozambique’s Tete Province
Slide 5
DFID Mozambique is also
working to establish a
partnership with Rio Tinto to
promote sustainable
agriculture in mining areas.
Offshore gas finds in Mozambique
Nigeria
Nigeria has estimated oil & gas reserves
to generate around $100bn over 40 years
BUT corruption means that oil wealth is
not helping the poor. Between 2009-2011
£4bn in fuel subsidies were siphoned off
This sum was calculated by a Nigerian
National Assembly committee which
received support from a DFID project
DFID Nigeria’s £5 million FOSTER project
is also supporting the national EITI
process which claims to have recovered
$442 million of outstanding revenues
The project also helps with the first pilot
to implement the Natural Resource
Charter
Slide 6
Sierra Leone
Sierra Leone’s civil war gave rise to the term
‘blood diamonds’ but the country is now
gaining double digit growth as it harnesses its
mineral resources for development. But weak
capacity in government jeopardises efforts
to achieve transparency and to negotiate
effective and equitable mining agreements for
iron ore, gold, rutile (titanium) and oil and gas
DFID is helping with essential reforms: We funded the establishment of a
National Minerals Agency to oversee all exploration and mining leases and
which the Minister of Mines recently presented to international investors as a
major sign of progress and commitment to good governance
We are also working with the World Bank (DFID contribution $3.5 million) to
provide technical assistance to the Ministry of Mines and Mineral Resources
Slide 7
Tanzania
Tanzania is a major player in the East
African offshore gas boom
IMF estimates that increased revenues
from gas, gold and nickel could reach
$3.5bn per annum even before new gas
discoveries (announced 18 March)
DFID Tanzania has taken a lead with the
World Bank to establish a strategic
dialogue between the government and
the international community – involving
Paul Collier
Other recent activity includes launching
analytical studies into the potential for
local economic linkages from gas
investments
Slide 8
Offshore gas blocks in Tanzania