*The energy transition brings economic opportunities for mineral-rich countries—but corruption and governance risks could undermine the sector’s promise*
transition is driving demand for minerals needed for low-carbon technologies, such as solar panels, wind turbines and electric vehicles. This demand could grow by up by a larger for some minerals over the next two decades, yet technological innovations also make these projections uncertain. According a new report from the Extractive Industries Transparency Initiative (EITI), produced by the University of Queensland, EITI implementing countries will likely play a substantial role in satisfying growing demand.
Government officials in many mineral-rich countries are excited about the mining sector’s economic promise. They are hoping for new investments that will bring in revenues, jobs and opportunities for local businesses.
But the prospects for converting natural resource wealth into sustainable development outcomes hinge on good governance. History points to the corruption and public finance risks that a mining boom can bring, including bribery in licensing, inadequate environmental and social assessments and lost revenues due to weak tax collection. In some cases, the mere anticipation of an uptick in investment could destabilize economies in mineral-rich countries.
*Corruption in licensing and procurement*
The business opportunities associated with a mining boom could be vulnerable to corruption. One key risk relates to the award of mining licenses. In many countries, authorities rush to approve new mines, with governments seeking to speed licensing processes.
Governments of resource-rich countries should promote transparency and accountability of the sector to mitigate these risks and realize their mining potential. They should publish more detailed information on the reserves and economic potential of transition minerals; strengthen oversight of companies’ revenue flows and financial relationships; and promote policies that support long-term economic planning and transparent decision-making
Otherwise we would be undermining the principle of permanent sovereignty over natural resources
Mugisha Imam
Team leader Youth concern on environment and development (YCED)
mugishaimax@gmail.com
+256773660294/0770923597