The World Bank has disclosed that Nigeria and other metals and mineral resource-rich countries in Sub-Saharan Africa can double revenues from natural resources such as minerals, oil, and gas. In a statement announcing the new Africa’s Resource Future report, the World Bank noted that these countries could achieve double revenue by adopting a better set of policies, implementing reforms, investing in better fiscal administration and promoting good governance.
The statement read, “In a time of energy transition and rising demand for metals and minerals, resource-rich governments in Sub-Saharan Africa have an opportunity to better leverage their resources to finance their public programmes, diversify their economy, and expand energy access.”
The Washington-based bank noted that on average, countries capture only about 40 per cent of the revenue they could potentially collect from natural resources.
It added, “In other words, at a time when countries are burdened by slow growth and high debt, governments could more than double revenues from natural resources such as minerals, oil, and gas by adopting a better set of policies, implementing reforms, and investing in better fiscal administration and promoting good governance.”
The bank also recommended full taxation of natural resources to charge the full cost of environmental and social impacts, which are not always fully covered by producers, including petroleum resources.
It warned that failing to tax natural resources could act as an implicit production subsidy and raise carbon emissions.
A senior economist in the World Bank Africa Region, James Cust, was quoted as saying, “Maximizing government revenues in the form of royalties and taxes paid by private natural resource industries, alongside attracting new investment, would offer a double dividend for people and planet by increasing fiscal space and removing implicit production subsidies.”
The World Bank noted that the prospect of higher revenues is significant in countries that are unable to make needed development investments because of high borrowing and debt service costs.