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Economic & Sector Work :: Mining/Oil and Gas

Revenue Sharing of Natural Resources in Africa : Reflections from a Review of International Practices

AUCTION BENEFICIARIES BENEFICIARY BID BIDS BLOCK GRANTS CAPITAL COSTS CAPITAL EXPENDITURE CAPITAL LOSSES CASH FLOW CASH FLOWS CASH PAYMENT CASH PAYMENTS CASH TRANSFERS CENTRAL BANK CENTRAL GOVERNMENT CENTRAL GOVERNMENT SPENDING CENTRAL GOVERNMENTS CENTRALIZATION CHECKS CLAIMANTS COAL COLLUSION COMPENSATION FUND CONFLICT OF INTEREST CONSTITUTIONAL MANDATE CONSUMERS CORPORATE INCOME TAX CORPORATE PROFIT TAX CURRENCY CURRENT EXPENDITURES DEBT DEBT REDEMPTION DECENTRALIZATION DEMOCRATIC INSTITUTIONS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT PROJECTS DISBURSEMENT DISCOUNT RATE DISCOUNT RATES DISTRICT DISTRICT ASSEMBLIES DISTRICTS DIVIDENDS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIC DEVELOPMENT ECONOMIC RENT ECONOMIC THEORY EFFICIENCY LOSSES ELECTRICITY ELECTRICITY PRICES EMISSIONS ENTITLEMENTS ENVIRONMENTAL ENVIRONMENTAL DAMAGES ENVIRONMENTAL ISSUES ENVIRONMENTAL POLICY ENVIRONMENTAL PROTECTION EQUALIZATION EQUIPMENT EXCHANGE RATE EXCHANGE RATES EXPECTED VALUE EXPENDITURE EXPENDITURE CUTS EXPLOITATION EXPLOITATION ACTIVITIES EXPORTS EXTERNAL DEBT EXTERNALITIES FEASIBILITY STUDIES FEDERAL CONSTITUTION FEDERAL COUNTRIES FEDERAL SYSTEM OF GOVERNMENT FINANCES FINANCIAL INSTRUMENTS FISCAL FRAMEWORK FORESTRY FRAUD GDP GOVERNMENT CAPACITY GOVERNMENT OWNERSHIP GOVERNMENT REVENUE HOLDING INCOME TAX INDUSTRIAL ECONOMIES INEFFICIENCY INSTRUMENT INSURANCE INTERGOVERNMENTAL RELATIONS INTERGOVERNMENTAL TRANSFERS INTERMEDIATION INTERNATIONAL BANK INVESTING ISSUANCE LANDOWNERS LEGAL FRAMEWORK LEVEL OF GOVERNMENT LEVY LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL INFRASTRUCTURE MACROECONOMIC IMPACT MARKET PRICE MARKET PRICES MICROENTERPRISES MINES MINISTRY OF ENERGY MINISTRY OF FINANCE MINISTRY OF INDUSTRY MUNICIPALITIES MUNICIPALITY NATIONAL BUDGET NATURAL RESOURCES NET REVENUES OIL OIL PRICE OPEC OPPORTUNITY COSTS PENSION PENSION FUND POLICY INSTRUMENTS POLICY OBJECTIVES PORTS POTENTIAL INVESTORS PRESENT VALUE PRICE FLUCTUATIONS PRICE INCREASES PRODUCERS PRODUCTION COSTS PRODUCTION RATES PROVEN RESERVES PROVINCE PROVINCES PROVINCIAL GOVERNMENT PROVISION OF INFRASTRUCTURE PUBLIC PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCE MANAGEMENT PUBLIC GOOD PUBLIC GOODS PUBLIC INVESTMENT PUBLIC SECTOR REGULATORY POWERS RENEWABLE RESOURCES RETURN RETURNS REVENUE FLUCTUATIONS REVENUE MANAGEMENT REVENUE SHARING REVENUE SHARING SCHEMES REVENUE VOLATILITY RISK AVERSE RISK AVERSION ROADS SAL SAVINGS SECTOR MINISTRY SHARE OF EQUITY SHARE OF INVESTMENT SHAREHOLDER SOVEREIGN RISK SUB-NATIONAL SUBNATIONAL SUBNATIONAL GOVERNMENT SUBNATIONAL GOVERNMENTS SUBNATIONAL UNITS SURCHARGES SUSTAINABLE DEVELOPMENT SUSTAINABLE EXPLOITATION TAX TAX ADMINISTRATION TAX BASE TAX BASES TAX CONCESSION TAX CREDIT TAX INSTRUMENTS TAX LIABILITIES TAX LIABILITY TAX OBLIGATION TAX PURPOSES TAX RATE TAX RATES TAX REVENUE TAX REVENUE SHARING TAX REVENUES TAXABLE INCOME TAXATION TAXPAYERS TIMBER TOTAL COSTS TOTAL REVENUE TOXIC SUBSTANCES TRANSPARENCY TREATIES TREATY VALUE OF OUTPUT WEALTH
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World Bank, Washington, DC
Africa
2014-09-10T22:55:08Z | 2014-09-10T22:55:08Z | 2014-04

The African continent is one of the world richest regions in oil, gas and minerals. Proven reserves have expanded and prospects improved recently making the continent an important player on the world stage. The share of natural resources in GDP is increasing rapidly. Exports of minerals and hydrocarbons account for more than a quarter of total exports in half of the sub-Saharan economies and the share of natural resources revenue (NRR) on total government revenue is expected to become dominant for an increasing number of countries. Wealth of natural resources offers opportunities but it also brings in challenges. Natural resources have generally been linked to a series of negative outcomes like economic decline, corruption and autocratic rule (McNeish, 2010). Oil and minerals reserves are often point source natural resources, being usually very spatially concentrated. Their discovery becomes almost inevitably a potential source of conflict between the governments, the people of the producing areas and those of the rest of the country (Fearon and Laitin, 2003). In other words, intergovernmental sharing is a big issue that needs a solution when natural resources are discovered and exploited. Full centralization of NNR is the exception rather than the rule, as we will observe in the paper. It is practiced for oil and gas by both autocratic regimes (such as Saudi Arabia and other Middle East countries), and fully fledged democratic systems, such as Norway and the UK. Full centralization does not imply, however, the absence of compensating mechanisms, or of indirect transfers in favor of the governments of the producing areas. In the UK, for example, Scotland receives no share of oil taxes, but is compensated with a larger share of block grants to local governments (the Barnett formula ). Norway rewards the local governments closer to the producing areas with generous infrastructure projects, such as tunnels and bridges linking very sparsely populated areas and islands. Autocratic countries may also use repression to quench the request for a share of NRR from their producing areas.

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