Oil, Gas and Mining in Africa

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AfDB, World Bank Experts Reach Common Grounds on Extractive Industry

Tunis, 13 February 2007 – A two-day Experience-Sharing meeting of African Development Bank and World Bank experts on the Extractive Industries (EI) in Africa came to a close on Tuesday in Tunis, after both sides identified key EI areas where they will collaborate for the benefit of all stakeholders in the industry.

The meeting was formally opened on Monday by Vice President Zeinab El-Bakri, who underlined the fact that that "there is a second opportunity for Africa, occasioned by the resource boom," which can be harnessed with the support of the two multilateral finance institutions.

Mrs. El-Bakri spoke about the relationship between the extractive industries and economic integration, the role of Regional Economic Communities, how the extractive industry could be linked to other sectors, as well as the knowledge gap in the industry. She urged the experts to explore new ideas on how to enhance benefits from natural resources for the continent’s development.

Over the two days, the experts examined ways and means of encouraging transparency and equity for the benefit of stakeholders in the extractive industries. The meeting, which was organized by the AfDB Governance and Economic and Financial Reform Department (OSGE), covered activities and experiences in the areas of oil, gas, and mining and focussed on building partnership among the two development banks. The experts discussed special themes such as ‘EI Work in Post Conflict Countries’, ‘Communities and Small Scale Mining’, as well as ‘Prospects for AfDB and World Bank Cooperation in the Extractive Industries’.

In his presentation, the Manager of the World Bank Oil, Gas and Mining Policy Division, Peter Van der Veen, said Africa had been at the centre of the sharp rise in the prices of global oil, gas, and minerals since 2002, spurred by demand from China, India, and other emerging markets.

"Revenue to raw material exporters is booming. Investment in new capacity is increasing. There is competition for access to resources between major consumers," he said, pointing out that the continent’s oil production as a percentage of world output rose from just over 3.5 percent in 2000 to almost 4.5 percent in 2005 and it is  expected to rise to more than 5 percent in 2010.

The following areas for further collaboration between the development banks were identified:

The AfDB and the World Bank will look into the issue of a regional mapping of the continent’s oil, gas, and mineral resources. By creating a geological data bank, African countries will gain access to more accurate information about their natural resource wealth and the associated costs of exploration, and thereby considerably strengthen their negotiating positions in the award of concessional agreements and contracts.

The two institutions also agreed to collaborate closer in terms of knowledge sharing within the EI sectors, including joint research and staff training.

The third point of agreement was on the need for a Rapid Response Advisory facility. This facility would provide funding for pre-qualified advisors to assist Regional Member Countries (RMCs), on a short-term basis, with contract negotiations and other urgent legal and regulatory issues related to the EI sectors.

The fourth agreement is related to promoting global initiatives—e.g., the EITI (Extractive Industries Transparency Initiative), where the experts agreed to collaborate in the effort to support implementation in the 17 African countries that have already joined the EITI. In addition, the two institutions agreed to jointly encourage additional resource rich RMCs to join the Initiative.

Finally, the banks agreed to support the development of artisanal mining through the Communities and Small Scale Mining (CASM) initiative and discussed how to better define collaboration between the two multilaterals.

The experts proposed to select two or three countries where the institutions could work together that would serve as a model for replication in other countries. They primarily identified the Democratic Republic of Congo and Madagascar for private sector partnership. Other countries, including post-conflict states, would follow suit. 

At the conclusion of the Tunis meeting, the two sides agreed to a more structured and regular experience sharing sessions between the two institutions.

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