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extractive industries

Large scale mining in Africa is a mixed blessing for women

Anja Tolonen's picture

The African continent is rich in natural resources, like oil, gas and minerals that contribute to a large share of exports, and are now a major source of foreign direct investment. In our paper African Mining, Gender and Local Employment, we investigate how this recent, rapid expansion in large-scale mining affects women’s job prospects.

According to previous research and policy documents, it is ambiguous whether industrial mining increases or decreases female employment. The “African Mining Vision” spells out the risk that extractive industries might make gender disparities in economic opportunities larger. The sector is generally known for weak local multipliers, i.e., for each job created in the sector, too few jobs are created in auxiliary sectors, such as services, manufacturing or construction. This is known as the ‘enclave’ hypothesis: that a large-scale mine generates few economic opportunities for local community members. On the other hand, mining activities may generate jobs in services and sales, which are relatively female dominated in the region and which are locally traded.

How parliaments could better contribute to the governance of revenues from extractive industries

Hassane Cisse's picture

Oil Pumps in Russia photo Kolodkin

Resource rich developing countries face challenges in ensuring that revenues from Extractive Industries (EI) are used to foster economic development, reduce poverty and promote shared prosperity.
 
Effective governance of extractive revenue is a precondition for ensuring that the ‘development dividend’ that is meant to flow from the decision to extract becomes a reality. Good governance of the sector requires sufficient participation, transparency, and accountability across the entire EI value chain.
 
A wide range of stakeholders can contribute to these governance objectives, whether they be government agencies, private sector, civil society, and formal accountability institutions, such as parliaments. 
 
Parliaments are coming to the fore as key stakeholders in ensuring that extractive revenues are equitably shared. That means making sure that extractive revenues are accurately captured in budget forecasts and estimates, appropriations are focused on delivering services to affected communities, and effective oversight of governments’ management of the sector is provided.
 
I participated in the recent 2015 Helsinki Parliamentary Seminar, hosted by the Parliament of Finland as part of the World Bank-Finnish Parliamentary Partnership, which brought together parliamentary delegations from Ghana, Iraq, Kenya, Mongolia, Somalia, South Sudan, Tanzania, Timor Leste, and Zambia to explore how parliaments could better contribute to the governance of revenues from extractive industries.

Partnering with the mining industry in good times and bad

Anita Marangoly George's picture
Heading to my first African Mining Indaba in Cape Town, South Africa recently, I was wondering how receptive mining companies would be to the idea of greater partnership given that commodity prices were at historic lows. While there was some hesitation from isolated voices, the overwhelming consensus was, YES, partnerships that promote shared benefits are critical to the sector in both the good times and the bad.
The key in this commodities downturn is to develop win-win partnerships. A central theme at Indaba was the importance of hiring and training local people, and increasing the focus on local procurement which, in turn, helps diversify local economies through linkages to mines’ supply chains. Best practices in training for small and medium-sized enterprises in health, safety, environmental and quality standards were highlighted as well as initiatives to ensure women share in the benefits flowing from mining evenly.
 


Collaboration is also key to ensuring that the power generated for mining in Africa benefits communities. Power-mining integration is essential when you consider that Sub-Saharan Africa today only generates 80 gigawatts of power each year for 48 countries and a population of 1.1 billion people. Two-thirds of people in the region live entirely without electricity and those with a power connection suffer constant disruptions in supply. Without new investment and with current rates of population growth, there will be more Africans without power by 2030 than there are now.

Oil exporters must shift capital stock to renewables

Håvard Halland's picture
Oil pumps, in southern Russia. Photo: Gennadiy Kolodkin / World Bank

As the Financial Times pointed out recently, oil companies such as Exxon Mobil and Shell would, under measures considered for the global climate pact to be sealed in Paris next year, cease to exist in their current forms in 35 years. The proposal of phasing out global carbon dioxide emissions as early as 2050 was not resolved in the UN climate talks in Lima last December.

However, the adoption of even a watered-down version in Paris or in later rounds of climate negotiations would mean that the amount of oil and gas produced by these companies, and the quantity of coal mined by enterprises such as Rio Tinto, would need to be greatly reduced by mid-century. Such long-term concerns might over the next years trump current worries about an oil price slump that could be on the wane as soon as marginal projects and producers are shaken out from the bottom of the market.

New Senior Director of Energy and Extractives on Challenges and Opportunities

Anita Marangoly George's picture

Q: As the new Director for the Energy and Extractives Global Practice at the World Bank, can you tell us about the greatest challenges you face in Extractives?

A: Extractive industries are complex and often risky, but when managed well they can foster transformative development in those countries that most need it.  Extractives play a dominant role in 81 countries whose economies together account for a quarter of world GDP. These 81 countries also represent half of the world’s population and nearly 70 percent of those in extreme poverty.  Given the need of these countries, a focus on natural resource management is important, but we must work diligently to mitigate the risks and improve governance structures so that the wealth generated from these activities benefits the poor.  Similarly, a cornerstone of all the work we do is to mitigate the social and environmental impacts of extractives projects so that they benefit neighboring communities as well as broader economic growth.  We also look forward to strengthening our work to improve governance of the extractive industries through efforts like the Extractive Industries Transparency Initiative (EITI) and minimizing the environmental footprint of projects by reducing routine gas flaring (Global Gas Flaring Reduction, GGFR).

Governance of Extractive Industries: Old Metal, New Polish

Michael Jarvis's picture
Making Extractive Industries’ Wealth Work for the Poor

















​Back in 2004, Extractive Industries Review noted that “the overall framework of governance within which Extractives Industries (EI) development takes place will be a major determinant of its contribution to sustainable poverty reduction.” The expert panel called for World Bank Group to do more on governance and transparency of the sector.

Can “Resource Financed Infrastructure” Fix the Natural Resource Curse?

Håvard Halland's picture
Resource Financed Infrastructure
Source: Getty Images/Sam Edwards.
 

In Africa, estimates indicate that an annual investment of $93 billion is required to address the continent’s basic infrastructure needs – more than double the current level of investment.

The lack of productive investment of resource revenues, with spending of these revenues often heavily tilted towards consumption, is a critical component of the so-called resource curse, the observation that countries rich in natural resources frequently have slow long-term growth. Following oil or mineral discoveries, as the expectation of increased wealth spreads, pressures to spend typically become hard for politicians to resist, public sector salaries go through the roof, wasteful spending increases, corruption may flourish, hidden foreign bank accounts may be established, and the number of unproductive “white elephant” projects grows.

How can resource-rich countries ensure that a large share of oil, gas, and mining revenues are used for productive investment rather than excessive or wasteful consumption?

Can Natural Resources Pave the Road to Africa’s Industrialization?

Paulo de Sa's picture

Many African countries face a dilemma. After a decade of consistent economic growth, often propelled by high commodity prices, half the continent’s population still lives in poverty. Even if rising demand for raw materials from the booming cities of China and India, among others, has driven growth in Africa’s mining sector, most of the continent has not yet translated mineral wealth into industrialization and widespread economic development. Most African countries continue to export raw materials and then pay a premium to import the products made with them.

Mining Contracts – Five Tips for Governments and the Rest of Us

Michael Jarvis's picture

Mining is a high stakes industry. For the growing list of countries looking to translate underground assets into tangible benefits above the ground, the ability to negotiate and implement a good deal is critical.  However, capacities to do so are often weak. A handy resource is now available to help countries. And it’s free!

Weekly Wire: the Global Forum

Kalliope Kokolis's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

CIMA

Is There a Link Between Digital Media and Good Governance?

"CIMA announces the release of its most recent report, Is There a Link Between Digital Media and Good Governance? What the Academics Say, by media development consultant Mary Myers. The report investigates whether there is a link between new digital technologies and good governance and what, if any, are the connections between digitally equipped populations and political change. It approaches these questions by examining what some key academics say on the matter. This paper is a follow-on from a previous CIMA report by the same author, Is There a Link Between Media and Good Governance? What the Academics Say, which profiled a number of key academics and their research on the links between traditional media and governance. This report turns, instead, to digital media and brings a selection of some key academic writing to a non-academic audience."  READ MORE
 


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