GREAT insights Magazine

Extractive Sector in the WAEMU: Regional Dynamics as a Driver of Growth

24-07-2014

Kabore, E.B. 2014. Extractive sector in the WAEMU: Regional dynamics as a driver of growth. GREAT insights, Volume 3, Issue 7. July/August 2014.

Despite the uncontested presence of a wealth of mineral substances in the West African region, as in the rest of the continent, the land remains geologically under-explored. With such potential in the substratum, the High Authorities of the West African States have quickly realised the extent to which the extractive mining industry could contribute to these states’ socio-economic development and to that of their populations.

After various states gained their independence in the 1960s, the general attitude towards the exploitation of resources was characterised by state-led, monopolist policies, whereby the exploitation of such resources was supposed to provide substantial financial revenue to help develop these new states’ economies. Unfortunately, as we have seen, the results have failed to meet expectations.

Lessons were learned from this experience. With the support of multilateral institutions, and following political reform and economic choices, the mineral sector in most West African states was opened to private, mainly international, investors starting in the 1990s. This period was characterised by national and individualist approaches, introducing into shared geographic areas an element of competition, rather than a cooperative approach between states. Consequently, the mining sector has failed to make the best possible contribution towards an improvement in the living conditions of populations.

The WAEMU: A Key Instrument in Mineral Cooperation

With an increasingly competitive global economy, states throughout the African continent (and elsewhere) were regrouped into regional blocks. In January 1994, at the instigation of heads of state and governments, the West African Economic and Monetary Union (WAEMU) was born. In West Africa, the Union groups together eight states: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

The WAEMU Treaty has the following objectives: (i) to strengthen the competitiveness of economic and financial activities; (ii) to ensure a convergence of performance and economic policies; (iii) to create between Member States a common market based on the free movement of persons, goods, services and capital, etc.; (iv) to institute the coordination of national sectoral policies by means of joint action and, eventually, common policies, especially in areas including mining; and (v) to harmonise, to the extent necessary for the smooth operation of the common market, legislation and particularly the taxation systems.

In this dynamic context, convinced that the extractive mining sector can be a key contributor to the socio-economic development of Member States, as it has been in industrialised countries like Canada and Australia, the heads of state and governments thus adopted the WAEMU Common Mining Code by passing the Additional Act No. 01/2000. The primary aims of the code are (i) the creation of an environment favourable to mining investments; (ii) the diversification of mining outputs; (iii) the transformation of minerals where they are produced; (iv) the co-existence of industrial mines and small-scale and artisanal mining; (v) the improvement of infrastructures; (vi) the growth of financial resources for the states and job creation; and (vii) preservation of the environment.

To implement this shared vision for mining, the WAEMU adopted the Community Mining Code by passing Regulation No. 18/2003/CM/UEMOA on 23 December 2003. The main reason behind the code’s adoption was to overcome disparities between states’ regulatory frameworks while improving them. Their inadequacies have failed to create a favourable environment for optimising the exploitation of mineral resources to the benefit of Union countries and their populations.

Accordingly, the eight WAEMU Member States have now established a clear policy and regulatory framework in which to align their respective initiatives designed to promote and develop a competitive mining industry serving their own sustainable socio-economic development.

These mechanisms are implemented under the leadership of the WAEMU Commission, the agency that implements the policies and guidelines set by the heads of state and governments.

Concrete Results

To this end, specific initiatives have been carried out for the benefit of Member States: 

1. The promotion of mine development in these states. The Commission facilitates participation by the states in various international (e.g. PDAC) and national (e.g. Mining Promotion Days in Burkina Faso, called ‘Promin Burkina’) events, real frameworks for exchange and for promoting their respective mining sectors. It provides technical and financial support to mining promotion days regularly organised by several Member States (e.g. Burkina Faso, Mali and Senegal).
2. Capacity building, a concern in the WAEMU area. The training of national experts in geographical information systems and both hardware and software at state documentation centres help improve data management, making them more accessible to investors and researchers. Likewise, the Higher Institute of Mining, Industry and Geology in Niger receives financial support for the purpose of building its capacity to train engineers in mining.
3. The promotion of good governance is well established in a number of Member States. Since its implementation, five Union countries have been certified as compliant with the Extractive Industries Transparency Initiative (EITI). Technical and financial support is provided to states for implementing the EITI process.
4. Frameworks for consultation are introduced by means of a policy of cooperation. To that end, meetings on a range of topics are held annually, giving participants the chance to exchange ideas and share experiences. Hosted by the various states in succession, these meetings involve key stakeholders, such as the public authorities in charge of the mines, representatives of chambers of mines and mining associations, organisations responsible for EITI, and women in mining.

In addition, and more globally, the WAEMU’s Common Mining Code and the Community Mining Code have greatly contributed to the development of Africa’s mining vision, a continental strategy which aims to use the mining sector as an effective tool for sustainable socio-economic development and the industrialisation of African states rich in mineral resources.

The outlook is such that various projects will emerge to further bolster the implementation of the Common Mining Code with a view to significantly optimising the extractive mining sector’s contribution to improving the living conditions of populations in WAEMU countries. As such, the Community Mining Code is currently being updated to reflect the changing international mining environment and to take into account the interests of the relevant parties, particularly those of local communities in areas where mining activities are carried out. Simultaneously, capacity building for states will be stepped up by (i) improving the management of data on geo-mining and mining cadastres; (ii) generating and managing modern mining contracts and agreements; (iii) improving the understanding of taxation and the mining economy; (iv) optimising the supervision of small-scale and artisanal mining; (v) improving basic geological and mining infrastructures; and (vi) strengthening ‘local content’ in the states, etc.

The WAEMU’s basic mission in the sector is to contribute to the equitable and optimal exploitation of mineral resources for accelerated growth and the sustainable socio-economic development of Member States, all in the context of the Africa Mining Vision.

Emile Bangraogo Kabore is Extractive Industries Officer at WAEMU.

 

 

 

 

 

 

This article was originally written in French, the version of which is available on the ECDPM website.
Le secteur extractif au sein de l’Union économique et monétaire ouest-africaine (UEMOA)

 

This article was published in GREAT insights Volume 3, Issue 7 (July/August 2014).