Burkina Faso’s EITI Report raises questions about bidding process under former regime

The signature bonuses paid were not foreseen in the fiscal code.

Since 2007, Burkina Faso has experienced a surge in production in gold, ranking the country as the fourth largest gold producer in Africa. Despite recent political turmoil, including the fall of President Blaise Compaore,  Burkina Faso published its 2012 EITI Report in December 2014. The report includes a description of a controversial competitive bidding process.

"More clarity needed" on use and management of signature bonuses

An international call for tender had been issued for the Tambao project, one of the largest manganese deposits in the region. This was subsequently cancelled and eventually the license was awarded through a sole select tender to the TIMIS group. This led to a legal dispute between the government and two other companies (Groupe VILLAR MIR S.L.L. and Générale Nice Ressources- Africa S.A.). Accounting records showed that US $10 million signature bonus was deposited into a government account titled “Special investments programmes”.

Signature bonuses are not foreseen as revenue stream by the country’s laws. The report recommends that laws are passed to govern this type of payment in terms of how the amount is established and the income administrated. 

Continued revenue increase due to higher tax rate

Key figures of the report show a slight decrease in production while revenue rose from US $236 million to US $371 million. This 57% rise is largely due to an increase in tax rate and increase in customs duties related to the mining sector. The report of 2012 also includes more reporting companies (26 companies from 18 in 2011). One can also find information about the beneficiaries of corporate social payments, and a license register for all companies operating in the mining sector.

 

For more information about Burkina Faso’s EITI, see www.itie-bf.gov.bf or visit the country page on the EITI website.

Note to editors: we encourage the republishing of our content. Please attribute this article with: "Burkina Faso’s EITI Report raises questions about bidding process under former regime” was published on eiti.org on 26 January 2015.