Just last week Wednesday, the Revenue Watch Institute, published its latest Resource Governance Index for 2013. The Resource Governance Index measures the quality of governance in the oil, gas and mining sector of 58 countries. After almost a year of assembling 46 expert researchers who gathered original data from all the 58 jurisdictions and the findings examined by 56 peer reviewers plus an independent review, the report for Sierra Leone and many other countries would make an uncomfortable reading. Overall, the index finds that only 11 out of the 58 countries have satisfactory standards of transparency and accountability. In the rest, the public lacks fundamental information about oil, gas and the mining sector. Most worryingly, more than half the sample, 32 countries, do not meet even basic standards of resource governance, performing weakly or simply failing.
So the question is: what does the report say about the quality of governance in the mining and extractive sector in Sierra Leone and how does Sierra Leone compare with its neighbour Liberia?
The 2013 index evaluates four components which reveal specific shortcomings of resource governance in each country: Institutional and Legal Setting; Reporting Practices; Safeguards and Quality Controls and Enabling Environment. But for the purposes of this article, I will deal with two of these components which have always been very crucial: Institutional and Legal Setting and Enable Environment. In the Institutional and Legal Setting Component, the Index looks at whether the laws and systems that encourage Integrity and Openness including basic transparency guidelines are lacking in the 58 resource rich countries. For Sierra Leone, the index ranks the country "Partial" with a score of 52 out of 100. Undoubtedly, with the passing of the Mines and Minerals Act, the launching of the GOSL online Repository System and the creation of the National Minerals Agency some progress has been made, but if you compare that score to that of Guinea and Liberia with 86 and 83 respectively you must be left with no doubts that there is still a serious issue of deficit in the Integrity and Openness in our mining and extractive sector.
In January 2012, the government and its international donors like United Nations Development Programme, German Society for International Cooperation, Revenue Development Foundation and World Bank launched a joint initiative called the GoSL Online Repository which records all public mining licences and related payments. But there is still concern that the public does not have a means to cross check whether the revenue payments on the repository system is accurate and whether other information which is in the public (not government interest) is being uploaded. Therefore, if anything, this index shows why President Koroma should ensure that the Freedom of Information bill should now become a law which will guarantee the public an access to the records of government on ALL original documents regarding mining agreements, mining transactions and mining revenues. And if you wonder why Liberia's Mining and Extractive Industry has consistently being regarded by reputable international organisations far more transparent and accountable than Sierra Leone's then wonder no more. In July 2010, President Ellen Johnson Sirleaf signed into law a Transparency Act titled "Liberia Extractive Industries Transparency Initiative Act" which stems from the internationally acclaimed Extractive Industries Transparency Initiative. By October 2010, President Sirleaf also signed into law a Freedom of Information Act which is now allowing the media and individual citizens in Liberia to demand information from their government and other public authorities regarding their mining and extractive industry. And this is why it was admirable that in the November 2012 elections the SLPP led by Maada Bio made a manifesto commitment to review and enact the Freedom of Information bill. But now, President Koroma has the opportunity to leave a legacy on the campaign for transparency especially in the mining sector by signing into law the Freedom of Information bill.
Another crucial area of the index is the "Enabling Environment" Component. This component deals with a country's levels of corruption, government's effectiveness, lack or presence of democratic institutions and the rule of law. Staggeringly, the 2013 Index scores Sierra Leone 24 out of 100 which according to the Index is a FAILING score. As a Sierra Leonean irrespective of one's political view to see your country given a FAILING score by an independent international institution is worrying. It is a stark reminder to the government and our APC praise singing friends that issues around corruption, government's effectiveness, democratic institutions, human rights and the rule of law still leave much to be desired at least in the eyes of some international institutions. Therefore as part of building his credentials and legacy President Koroma will still need to convince institution like the Revenue Watch that in the Resource Governance sphere his government is creating the right enable environment like tackling corruption more ruthlessly, presiding over a more effective government, providing the political will for democratic institutions to thrive and respecting the rule of law. However, even our neighbours, Liberia, does not seem to have pulled this off as they only score 31 out of 100 on "Enable Environment" which is also regarded as "FAILING".
Overall, Sierra Leone has been ranked 35th out of 58 countries with a score of 46 out of 100 which is regarded by the Index as WEAK. It represents the lowest ranking in the Mano River Union below Liberia which ranks 16th with a score of 62 and Guinea which ranks two spaces above at 33rd with a score of 46. However, if there is any comfort we can take from the Index ranking, we are still ranked above countries like China and Nigeria but for a country of our size, population and amount of mineral resources such a comfort may seem more like complacency because if Liberia can perform so outstandingly to be ranked 16th then we are also capable of attaining that rank and even do better than them.
But maybe you will ask yourself: why is this ranking important for Sierra Leone? The answer is that Sierra Leone is one of the largest deposits of mineral resources – diamonds, iron ore, rutile, bauxite, gold, platinum, tantalite, zircon, ilmenite, chromites and colombite. In 2010, Sierra Leone was ranked as the world's 10th producer of diamonds by volume and the world's third ranked producer of rutile. In the same 2010, we exported a total of 550,395 carats of diamonds worth $129.6 million. For the last couple of years, our country has attracted major oil producers and exploration licences have been awarded to oil companies. In fact, some experts estimate that the country will be getting US$100 million year just from oil and gas. Therefore, it is crucial that we have Independent International Institutions like Revenue Watch and the Extractive Industries Transparency Initiative (EITI) serving as watchdogs on the activities in our mining sector to increase transparency and public awareness.
For instance, in September 2012 when the Sierra Leone's Extractive Industries Transparency Initiative (EITI) Report was published it revealed that the government only received US$18.5 million in revenues from 2008 to 2010. By the EITI's analysis, with our population of about 6 million, it works out every Sierra Leonean would have received just US$ 1 from the revenues every year. And if you compare that to Liberia, the Liberian government's revenues just for the fiscal year ending in June 2010 were US$ 72 million which means that the amount of revenues the Liberian government reported to have taken for just a fiscal year (July 2009 – June 2010) were almost 4 times more than what our government reported to have received in three years: 2008, 2009 and 2010. In fact, as I write the present figures on the GOSL Online Repository shows that the total revenue the government has received (since 2010 as I understand it) amounts to US$48,120,363 but just compare that again to the latest EITI's report on Liberia which only spans from July 2010 to June 2011, the report states that the total amount received by the government of Liberia from the extractive industry amounts to US$117,802,566. Hence, irrespective of our political views, we can all agree that the case for transparency and accountability cannot be made any better than these figures.
This is why when President Koroma said few months ago in the launching of the National Mining Agency that "The Agency will play a critical role in ensuring that the mining sector is of benefit to all Sierra Leoneans. My administration is determined to make our mineral resources a strong force for good in Sierra Leone, playing a key role in lifting standards of living and employment prospects for all", I am sure the president must have spoken the wish of all Sierra Leoneans. But until ordinary people begin to feel the benefits of our God given resources then his legacy on the Mining Sector will have a mixed review And if anything, the recent suspension of Sierra Leone's candidacy by EITI and this Resource Governance Index show that for ordinary people to benefit from our mineral resources we need more than words; we need more actions to improve transparency, openness and accountability by passing the Freedom of Information bill and we need better ways of ensuring that ordinary people and communities directly benefit from our mining revenues. So over to you sir, your Excellency!