EITI Report shows that revenues are up by almost four times but remain a small part of the economy.
Although revenues from the oil, gas and mining sector in Sierra Leone in 2011 remained less than 1% of GDP, they are growing fast – from US $7.5 in 2010 to US $27m in 2011. Previous EITI reports had shown no increase in revenues between 2006 and 2010, so the increase in 2011 is significant with signature bonuses in the oil and gas sector being the major component. In 2011 oil and gas revenues outstripped mining revenues for the first time. Though still small, revenues from oil, gas and mining are forecast to grow to up to 17% of GDP by 2020.
These figures were disclosed as part of Sierra Leone’s implementation of the EITI Standard. Implementation of the EITI requires full disclosure of payments made by oil, gas and mining companies to the government. The report discloses that the four oil and gas companies in the country - Talisman, Lukoil, Anadarko, and European Hydrocarbon – accounted for over US $15m revenues, of which almost US $14m was paid in signature bonuses. Talisman alone generated over a third of total government revenue from the extractive sector. In addition, the 21 mining companies – dealing in gold, diamonds, bauxite, iron ore and rutile - provided a further US $12m.
The Government of Sierra Leone considers the EITI as central plank of its efforts to improve the prudent management of natural resources: the second pillar of the National Agenda for Prosperity. The reforms include the development of a Core Minerals Policy, implementation of the Natural Resource Charter, and the Africa Mining Vision of the African Union.
As HE President Ernest Bai Koroma said at the launch of the report in Freetown on 14 January: “My government is committed to avoiding the negative consequences by ensuring that the natural resource wealth of this country is harnessed responsibly and for the benefit of all Sierra Leoneans… becoming EITI compliant is one of the ways of ensuring improved governance of the sector”.
The report includes a brief description of the legal framework of the sector, and the types of licenses and taxation applicable to the oil, gas, and mining sectors. The report also includes the license register number of each company, information about the commodity explored/produced and details on equity ownership. Some companies have also reported on production.
Sierra Leone was temporarily suspended by the EITI Board in February 2013 for failure to achieve EITI compliance following two validations, which is the quality control mechanism of the EITI. This report seeks to address the main corrective actions agreed by the Board before lifting the suspension. The report is now being assessed by the International Secretariat in order to make a recommendation on whether to proceed with a full Secretariat Review.
For more information, plese visit the Sierra Leone country page on the EITI website.