The extractive industry has contributed just over 200 billion CFA francs to Senegal’s national budget out of a total of over 6,000 billion CFA francs, according to a report dedicated to the sector.
The Extractive Industry Transparency Initiative (ITIE) of Senegal published, on Thursday, December 22, 2022 in Dakar, the results and conclusions of its 2021 report. These show a contribution of the extractive sector of 223.15 billion CFA francs to state tax revenues, including 206.04 billion CFA francs allocated to the budget.
Revenues from the extractive sector rose by 38.99 billion, compared to fiscal year 2020, representing a 21.8-percent increase.
Most of the contribution comes from the mining sector, which has increased by 40.16 billion CFA francs, from 162.85 billion CFA francs in 2020 to 203 billion CFA francs in 2021, Senior Minister and President of ITIE Senegal, Awa Marie Coll Seck said.
According to her, this development in the mining sector is a direct result of the increase in gold production, the rise in zircon and phosphate prices between 2020 and 2021; the increase in mining royalties paid by the gold mines (Sabodala-Massawa and Mako), rising from 17.847 billion CFA francs in 2020 to more than 25 billion CFA francs in 2021; cumulative payments by BARRICK GOLD of 9.678 billion CFA francs in tax adjustments; and the evolution of payments received by the Treasury for dividends and income tax on securities (IRVM) and corporate income tax (IS) collected by the revenue authorities.
The contribution of the extractive sector to the Gross Domestic Product (GDP) amounts to 4.98 percent and 6.94 percent to state revenue, said Mrs. Seck, adding that the contribution is still noticeable in exports.
Modest market share of local companies
In addition, the report’s findings reveal a weak presence of national companies in the supply of goods and services to the extractive industries. The volume of transactions with local suppliers in the mining sector amounts to 256.927 billion CFA francs, compared with 810.730 billion CFA francs for foreign suppliers.
For the hydrocarbons sector, transactions with local suppliers amounted to 113.538 billion CFA francs. With foreign suppliers in the oil sector, transactions are estimated at 675.290 billion CFA francs.
“In the light of these data, we note that the market shares of local companies remain modest, hence the urgency to further analyze the data of the ITIE report to inform public policy in this area,” Awa Marie Coll Seck pleaded, hailing the efforts of local content reforms in the sector.
She also seized the opportunity to invite companies in the extractive sector to strengthen environmental and social accountability. “The ITIE report indicates that for this year companies have paid more than four billion CFA francs in social spending. Environmental spending is still low,” she lamented.
Nevertheless, she praised the efforts of mining companies to contribute to the payment of the annual lump-sum guarantee to the Mining Site Rehabilitation Fund housed at the Deposit and Consignment Office ‘CDC’.”
ARD/te/fss/abj/APA