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The African Development Bank (AfDB) Group has endorsed the Extractive Industries Transparency Initiative (EITI), which is expected to enable mineral rich African countries derive greater benefits from oil, gas, mineral and other natural resources, by publicly disclosing revenues and using their proceeds for development. This endorsement comes ahead of the International Conference on the EITI scheduled to take place in Oslo, Norway from October 16-17 2006, to which President Kaberuka is leading a Bank delegation.
The Bank’s endorsement of the EITI also follows a meeting of representatives of the Norwegian Agency for Development Corporation (NORAD), the World Bank and the EITI in Tunis earlier, where experiences were shared with Bank officials on the key challenges in the extractive industries and institutional policies and activities related to the sector. In opening the meeting, AfDB Vice President Zeinab El Bakri said "there is an important role for revenues generated from oil and gas and other extractive industries in public financing of economic and social development programmes." "Opportunities for many resource-rich countries in Africa lie in the fact more and more investors are interested in extractive industries, but which present challenges with regard to the management of revenues, ensuring accountability and avoiding corruption on the one hand, while promoting sustainable development in the context of transparency and fiduciary discipline on the other," she emphasized.
The Bank’s endorsement of the Initiative is expected to help resolve one of the most striking paradoxes of the African continent where countries with vast mineral wealth are among the poorest in the world. Fourteen of the 22 countries around the globe that have joined the EITI are in Africa. The donor partners of the EITI include the G8, and Norway. A group of companies and industry associations as well as the IMF and World Bank, ERBD and OECD, and the "Publish What You Pay Coalition," are also participants.
The Initiative is in sync with the Bank Group’s Policy on Good Governance approved in November 1999 and aimed at supporting good governance practices in its member countries in a manner consistent with its charter, mandate, and development priorities. Key governance lessons of relevance to EITI include the fact that improving accountability helps tighten revenue collection and expenditures; to increase transparency, freedom of information and public disclosure of expenditures are needed; corruption is engendered by weak regulatory frameworks, low public sector wages and poor service delivery, and low levels of participation in political and economic activities emerges when there is little citizenship involvement in planning and monitoring of public expenditures.
The global EITI community adheres to principles such as prudent use and proper management of natural resources for the benefit of the citizenry, understanding government generate revenues and expenditure by the public for informed choices, transparency by governments and companies in the extractive industries; and above all, and stakeholder engagement.
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