IDEAS FIRST, AFRICA! Gold Boom in West Africa

Ideas First, Africa! reproduces in English Language a rundown on a publication by RFI on recent developments pertaining to the gold industry in West Africa.

In the summer of this year, gold surpassed the US$2000 per ounce mark on  international markets and the trend was expected to continue to the great delight of countries in West Africa that have become major producers. In times of crisis, revenues from gold mining have become indispensable to the states.

Ghana, Mali, Burkina Faso and Côte d’Ivoire: the golden quartet of West Africa. Between the four of them, they produce more than 320 tonnes of gold each year—a figure expected to grow, given theconsiderable reserves identified. A country like Mali estimates its reserves at 7,000 tonnes. Didier Julienne, a French specialist in the sector points out that whilst South African mines are becoming exhausted, those of West Africa are in full growth. He accounts for the situation as follows:

“These [West African mines] are relatively new gold mines compared with those in other countries that have been worked on an industrial scale for decades, indeed centuries.These mines are by no means exhausted. They are lucrative. Their competences are relatively well rated than those of less stable countries.They therefore have all the qualities of becoming high-performance mines in the years to come.”

Gold has become the leading export commodity in Mali and Burkina Faso — generating sizeable fiscal receipts. Toussaint Bamouni, executive director of the Burkina Faso Chamber of Minesprovides the following statistics: gold production accounts for nearly 256 billion francs CFA (390 million euros) of direct contribution to the state budget i.e. nearly 20% of the budget; constitutes13.1% of the country’s GDP (as of 2019), and has since 2009, accounted for nearly 70% of the country’s export revenue.

Figure 1 An artisanal gold miner. Credit: reuters.com

Redistribution of revenue

Burkina Faso has 15 working gold mines generating about 50 tonnes and Mali 10mines, generating nearly the equivalent. In both countries, industrialists have created more than 10,000 direct jobs. Consistently, in areas with gold deposits, populations complain about not seeing the effects of mining operations. Burkina Faso has set up a mechanism for redistributing revenue from gold.  Toussaint Bamouni explains that the 2015BurkinabéMining Code instituted a certain number of mining funds notable among them the Local Development Mining Fund which allowed contributions to the tune of 30 billion francs CFA to be made to local development in 2019. “And for the first half of this year this fund has already contributed about 21 billion francs CFA to the budgets of districts and regions.Thus since the fund became operational, 51 billion francs CFA has been distributed in Burkinabé districts and regions,” he announced.

As industrialists are engaged in the core business of producing gold in West Africa, millions of artisanal gold washers are also assured of their livelihood, thanks to the yellow metal.

The attempt to organise and supervise

In Burkina Faso, artisanal production of gold is under-reported. A million-and-a half gold washers work in the sector and many of them neglect to pay their taxes. According to Toussaint Bamouni, a study carried out in 2017 showed that artisanal mining yielded about 10 tonnes yearly.In reality however, what was declared to the state was less than 400 kilograms: a state of affairs revealingthe extent of fraud being perpetrated on state revenue.To create an incentive to gold washers to sell to official structures,Burkina Faso has initiated action aimed at reducing the prevailing tax to a third:i.e. from 600,000 FCFA per kilogram of gold to 200,000 FCFA.

In Mali the problem is mainly about the difficult relations between industrialists and artisans.Territorial conflicts are numerous and the Chamber of Mines has been working to structure gold washers with help from the World Bank. Abdoulaye Pona, the President of the Mali Chamber of Mines contends that it is necessary for artisans to be trained and put together in cooperatives. He also deems it necessary for the state to create corridors forthe artisans to develop in them. “Once they have these corridors there will no longer be any reason for them to go and squat on land belonging to an industrialist. As long as that does not exist, conflicts will continue for a long time,”he opined.

Burkina Faso envisions its gold washers transform into small industrial units. In Mali, as in Burkina Faso, the authorities are beginning to take into account issues of ecology. Gold extraction entails the use of products such as mercury and cyanide that pollute soils and water courses. The problem is that whilst industrialists are monitored, same may not be said in respect of the millions of artisanal gold washers.

The writer is a member of staff of the Ghana Parliamentary Service

estaloica@gmail.com

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