African governments that lack the capacity to mine resources themselves have to attract Foreign Direct Investment (FDI). However, since resources are not renewable, countries need to capture a ‘fair’ share of mineral resource rent to promote their development. The sharing of mineral resource rent between governments and investors is often criticised for being unfavourable to African governments. But what do we really know about the mineral resource rent sharing in Africa?
The aims of this research project are two-fold: first, to review theoretical and empirical studies on rent sharing in developing countries, secondly, to propose guidance for creating tools (database, rent sharing model, indicators, etc.).
The first FERDI/ICTD contributions would be (a) an historical legal and tax database, (b) a rent sharing database. The pilot database would be on the gold sector. The second FERDI/ICTD contribution would be to make available a model for the sharing of mineral resource rent between the government and investors, in order to facilitate swift and standardised comparison at the national level (between companies in the same country) and regional level (between French-speaking and English-speaking countries).
For FERDI and ICTD, the creation of this database forms just part of a larger project whose aim will be to conduct in-depth research into the value of the sector's tax potential, the tax optimisation practices of multinationals and the knock-on effects that the mining sector has on the rest of the economy. The research will be conducted on a range of West African Economic and Monetary Union(WAEMU) and other Sub-Saharan African countries.
The research team comprises:
- Bertrand Laporte, Project Coordinator, FERDI and Associate Professor at University of Auvergne, CERDI-CNRS.
- Céline de Quatrebarbes, Project Manager , FERDI and Research Officer, FERDI.
- Yannick Bouterige, Research Aassistant, FERDI.