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‘2013 reconciliation report showed significant increase in gov’t revenue’

January 9, 2017 By Ibrahim Tarawallie

The Sierra Leone Extractive Industries Transparency Initiative (SLEITI) has ended nationwide dissemination of its 2012, 2013 and 2014 reports produced by independent auditing firms from Ghana and Sierra Leone.

According to National Coordinator Mina Horace, key findings of the 2013 reconciliation report showed a significant increase in government revenue by 45.8 percent from US$ 27.6 million in 2011 to US$ 60.3 million in 2013.

“Mineral royalty increased by over 800 percent between 2011 and 2013. The increase in revenue is attributable to substantial increase in iron ore production,” she said.

She stated that the report further shows that total reconciled payments by mining companies amounted to over US$48 million, representing 80 per cent of total extractives revenue and 2.6 percent of Gross Domestic Product, while total reconciled payments, by oil and gas companies, amounted to over US$12.2 million, representing 20 per cent of total extractive revenue.

She added that the total reconciled receipts by government entities, district and chiefdom councils from mining companies amounted to US$39.263 million, while total reconciled revenues reported from oil and gas companies amounted to US$ 9.6 million.

The SLEITI National Coordinator maintained that the nationwide activities, which ran from 27 to 31 December 2016, were aimed at sharing findings of the reports to stimulate debate and at the same time create a forum to discuss how the mining, oil and gas sectors could enhance national development in the next 10 years.

“A major eye-catching finding of the report showed that the biggest contributor to revenue in the mining sector was African Minerals Limited, accounting for 36 per cent (US$21.686 million) of total revenue, while A-Z Petroleum Ltd in the oil and gas sector contributed the most, accounting for 16 percent (US$6.557 million) of total revenue,” the national coordinator added.

Speaking on the 2014 Report, Madam Horace stated that government receipts after reconciliation amounted to US$53.1 million and company payments of US$ 47.8 million, adding that in 2013 there were increases in the payments of mining and exploration licenses, indicating potential increase in mining activities in the years that followed.

The oil and gas sector, according to the national coordinator, raised some 15 percent of total government receipts, a drop from 20 percent in 2013, noting that mineral royalty remained the highest contributor to government revenues, having occupied the same position in 2013, although its percentage contribution reduced from 62 percent in 2013 to 57 percent in 2014.

While highlighting the findings of the 2012 report, the national coordinator said revenue from royalty payment contributed the most to mining revenue, while signature bonus contributed the highest to oil and gas revenue.

“The recommendations proffered in the 2012,2013 and 2014 reports were similar and aimed at addressing the challenges associated with the sector and included streamlining surface rent payment, ring fencing for corporate tax purposes, designing a mechanism to check transfer mispricing, and timely disbursement of Agricultural Development Fund to host mining communities,” she noted.

Since EITI reports were meant to stimulate public debate for informed decision-making, presentation of the findings in all the regions followed a similar trend with stakeholders, government officials, representatives from host mining communities and the media commenting and responding to the findings.

Key issues raised by the public throughout the dissemination included aligning royalty payment with countries in the sub-region to avoid smuggling. Another issue was the distribution pattern of surface rent, which they said should be looked into by government and that the scope of the EITI report should also cover forestry and fisheries.

The reports were first launched at a grand ceremony held at Hill Valley Hotel in Freetown which attracted participants from across the country. The implementation processes were facilitated by civil society organisations like Network Movement for Justice and Development (NMJD), with operations in the east, the Centre for Democracy and Human Rights, based in the north, and Green Scenery, which advocates for land justice and the environment.

 

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