Fiscal opportunities and challenges derived from the management of extractive resources revenues

The economies of resource-rich developed countries are highly dependent on well-functioning management of extractive resources in turning opportunities into advantages to benefit the population as a whole and aim at achieving sustainable development. For resource-rich developing economies however, various challenges impose obstacles, which hinder realisation and, indeed, optimisation of revenues, as reflected in experiences from Nigeria and Ghana. Extractive resource revenue management requires transparency and accountability in the entire process if benefits are to be unleashed for sustainable development. Although there are countries doing extremely well in the business of extraction of natural resources, many African resource-rich countries have shown a lack of commitment to learn from such countries, especially the United States of America, Norway and Botswana. The latter have been able to mainstream their natural resource extractive operations into beneficial strategies which significantly impact the effective harnessing of the socio-economic potential of those countries, including poverty reduction. This paper aims at outlining challenges and opportunities in the management of natural resources by exploring fiscal opportunities within the larger context of strategic influence of taxation and its usage on development. Although transparency might be one of the most important factors for sustainable development, the critical role of focused long-term strategy that thrives on effective utilization of natural resource revenues cannot be over-emphasised. Additionally, holding the government accountable for actions in respect of tax management and revenue usage is equally important in the march toward the attainment of sustainable growth and development.