Sierra Leone exported over Le438bn worth of diamonds

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April 25, 2019

By Hassan Gbassay Koroma

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National Coordinator for SLEITI, Mina Horace

In its 2015 and 2016 reports, the Sierra Leone Extractive Industries Transparency Initiative (SLEITI), has revealed that the country exported Le438, 889,400 worth of diamonds from 2016 to 2018.

The National Coordinator for SLEITI, Mina Horace, made the disclosure on Wednesday, April 17th during her presentation at a stakeholder’s engagement with the Western Rural District on their nationwide sensitization and dissemination of the 2015 and 2016 EITI reports.

The reports state that the country exported diamonds worth Le158, 901,646 in 2016, adding that in 2017 and 2018 it exported Le123,137,753 and Le156,850,001 respectively.

According to the reports US$276,700 was paid by diamond exporters, but that mining companies including Koidu Holdings Ltd, Sierra Minerals, Sierra Rutile, Sierramin Bauxite and Shandong Steel refused paying corporate tax for 2016.

The report observed that in 2016, payments were made in the name of some parent companies with no reference to the subsidiaries that were holders of mineral rights.

However, the report maintained that during the year under review, Sierramin Bauxite Company, refused making Royalty Payments.

Earlier, madam Mina Horace said the EITI is the global standard for transparency and accountability, noting that countries across the world that have minerals like diamond, gold, iron ore, bauxite and others. were free to join the EITI with the aim for their citizens to benefit from those minerals.

She said Sierra Leone has been part of the initiative for thirteen years and that the current government has decided that the initiative should continue with their full support for the betterment of the country.

She further that citizens also have the expectation that lot of taxes were paid to the government, which was why they  completed and published their 2015 and 2016 reports, and that they were now working on the 2017 and 2018 report respectively.

Communications Officer of SLEITI, Mohamed Fernando Conteh, said in the late 1990s and early 2000s, there was an expanding library of academic literature around the “resource curse” by renown scholars such as Paul Collier, detailing how the huge potential benefits of gas and mining were not being realised and were associated with increased poverty, conflict, and corruption.

He said the writings outlined the complexities of the governance of extractive resources bidding, exploration, licenses, contracts, operations, revenues, supply chains, state involvement, trading, local content, transit, services, allocations, and spending.

He said the EITI was guided by the belief that a country’s natural resources belong to its citizens, adding that the EITI established a global standard to promote the open and accountable management of oil, gas and mineral resources.

He said the EITI Standard requires the disclosure of information along the extractive industry value chain from how extraction rights are awarded, to how revenues make their way through the government, and how they benefit the public.

He said the EITI requires effective multi-stakeholder oversight, including a functioning multi-stakeholder group that involves the government, companies, and the full independent, active and effective participation of civil society.

He further that the EITI requires a comprehensive reconciliation of company payments and government revenues from the extractive industries.

He said an understanding of company payments and government revenues can inform public debate about the governance of the extractive industries.

He said the EITI requires disclosure of information related to revenue allocations, enabling stakeholders to understand how revenues are recorded in the national and where applicable subnational budgets.

He said the EITI requires disclosures of information related to social expenditures and the impact of the extractive sector on the economy, helping stakeholders to assess whether the extractive sector was leading to the desirable social and economic impacts and outcomes.

Meanwhile, the report noted that some companies declared losses in 2015 and 2016 and were not liable to pay tax and other companies declared profit, but had enough tax credits or accumulated tax losses to ensure no taxes were paid.