Revenue Sharing in Mining in Africa: Empirical Proxies and Determinants of Government Take

Authors: Olav Lundstøl
Publisher: ICTD
Date: September 2018

Abstract:

ICTD Research in Brief 26

This ICTD Research in Brief is a two-page summary of ICTD Working paper 81 by Olav Lundstøl. This series is aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time. The paper examines the resource rent literature and findit a complicated basis for assessing revenue sharing between government and companies. An alternative approach that compares the relative contribution of mining to government revenue and gross domestic product is utilised as a proxy for this purpose. Using a twenty-year data set for dominant mining countries in Sub Saharan Africa together with two benchmark global mining countries, we estimate foregone mining government revenue of 2–13 percent of GDP per year on average for countries such as Ghana, Tanzania and Zambia in particular.