Giving Compass' Take:

• The Natural Resource Governance Institute breaks down attempts in sub-Saharan Africa to reform laws around natural resources and what those efforts translated to on the ground. 

• How can funders help facilitate the implementation and enforcement of legal reforms? What do these reform attempts mean for funders in the region? 

• Learn about the need for a more robust understanding of natural resource depletion. 

Over the past two decades, many African countries have adopted new oil, gas and mining laws. Legal reforms have aimed to modernize legal frameworks and attract investment while ensuring benefits to government and citizens. Reforms at the national level have been complemented by regional and international frameworks such as the Africa Mining Vision and the Extractive Industries Transparency Initiative, as well as policy harmonization in regional economic communities. A key finding of the 2017 Resource Governance Index from 28 countries in sub-Saharan Africa is that there is a significant gap between the state of resource governance according to these laws, and practices on the ground.

Legal reform efforts are visible in the performance of 28 sub-Saharan African countries assessed in the 2017 Resource Governance Index (RGI). Sub-Saharan Africa outperforms other regions, on average, in assessment of the legal framework for resource governance. Many laws include strong provisions for transparency and accountability: rules for disclosure of extractive sector data and publication of contracts have the potential to support negotiation of better deals. Requirements to address local impacts of extraction can potentially mitigate negative effects and contribute to community development. In many sub-Saharan African countries economic swings largely follow commodity price fluctuations. In these countries, revenue management laws can help balance volatile resource revenues and channel them to development needs in these countries.

However, the benefits of a robust legal framework materialize only when institutions and practices to implement the rules are in place. Twenty-six out of the 28 countries assessed perform better when it comes to rules than practices. The more recent the legal reform, the wider this “implementation gap.” Within the sub-Saharan region, we find the largest implementation gaps in two areas: transparency of environmental and social impacts and revenues shared with local government, where regulations that serve to implement legal reforms are often lagging. Sub-Saharan Africa also lags behind other parts of the world in implementation of laws relating to transparency and oversight of key institutions such as state-owned enterprises and sovereign wealth funds, and compliance with fiscal rules.

This report explores common resource governance successes and challenges in sub-Saharan Africa, taking advantage of the rich dataset and wealth of evidence documentation provided by the Resource Governance Index. While we detect common trends across the region, there is also great diversity between and within countries. This report documents examples of good practices from which officials in other countries can learn. We conclude with the suggestion that policymakers, parliamentarians, civil society, media and regional institutions focus more on narrowing the implementation gap, which will help to restore trust between government, communities and investors and thus strengthen sustainable management of natural resources. Creating space for public debate, strengthening capacity of public institutions and oversight actors, addressing lack of political will and learning from past legal reforms are possible solutions to address the implementation gap.

In this report we do not attempt to cover all questions relevant for resource governance in Africa. We invite all stakeholders to explore the report and make further use of the index data and the repository of evidence documents, which comprises over 10,000 legal texts, reports and other data sources.

Key Findings: 

Many sub-Saharan countries have made significant legal reforms in oil, gas and mining over the past decades. The Resource Governance Index shows that in all but two countries, there is an “implementation gap” between what laws say and how resource governance works in practice. This keeps countries from realizing the dividends of investments they have made in legal reforms.

Between 2000 and 2016, 22 of the 28 sub-Saharan countries included in the Resource Governance Index renewed or amended laws governing the oil, gas or mining sector. Where legal reform is more recent, implementation of transparency and accountability provisions is lagging the most.

More so than countries in other regions, sub-Saharan African countries face challenges with:

  • fulfilling commitments to transfer oil, gas and mining revenues to local authorities
  • publishing information on social and economic impacts of extraction
  • complying with fiscal rules
  • governing state-owned enterprises and sovereign wealth funds

To close these gaps, governments and other stakeholders should focus on implementation and enforcement of transparency and accountability rules. They should invest in monitoring capacity of government agencies, strengthen the role of auditors and parliaments, and ensure there is space for different stakeholders to question policies. Consulting stakeholders will help governments to design laws that are adequate for each country’s institutional capacity and policy objectives and to assess what is needed for effective implementation already before laws are passed, reducing the time lag from legislation to implementation.