REPORT: Transparency in oil and minerals sector could unlock billions for development

Kampala, Uganda | THE INDEPENDENT | A new report from the Extractive Industries Transparency Initiative (EITI) shows that resource-rich countries can significantly boost public revenues and sustainable development through transparency and sound fiscal management.

It notes that with shrinking aid, rising debt, and volatile commodity markets, strengthening domestic revenue mobilisation is more urgent than ever.

The report highlights that transparent reporting, multi-stakeholder engagement, and better management of oil, gas, and mineral revenues could fund essential services and advance the Sustainable Development Goals.

The report says effective management of natural resources can drive sustainable development, but only if revenues are collected transparently and spent in the public interest.

It highlights the urgent need for resource-rich countries to strengthen domestic revenue mobilisation (DRM) amid shrinking international aid, rising debt, and volatile commodity markets.

For countries heavily dependent on extractives, such as Iraq, where oil and gas generate over 90% of government revenue, or the Democratic Republic of the Congo, where minerals account for nearly all exports, ensuring that resource wealth benefits citizens is a pressing challenge.

The EITI report shows that transparency initiatives can play a vital role in achieving this. Since its inception in 2003, EITI reporting has disclosed nearly USD 4 trillion in government revenues across 55 countries.

Uganda, as a member of the EITI initiative, is one of the countries whose revenues from the extractives industry have been disclosed.

This transparency has helped governments identify revenue losses, renegotiate contracts, and strengthen fiscal governance.

For instance, in the DRC, EITI analysis contributed to a multibillion-dollar renegotiation of a mining agreement, while in Ghana, it helped halt the sale of undervalued gold royalties, preserving hundreds of millions in public funds.

Helen Clark, EITI Board Chair, said: “As competition for resources accelerates and external financing tightens, the question facing resource-rich countries is no longer whether transparency matters, but whether they can afford to do without it.”

The report stresses that domestic revenue mobilisation is about more than collecting taxes. While governments focus on fiscal stability, civil society advocates for accountability and public service delivery, and companies benefit from predictability and community trust.

EITI’s multi-stakeholder approach, which brings together governments, companies, and civil society, provides a platform to discuss fiscal terms, monitor production, and model revenue impacts, ensuring that extractive wealth translates into sustainable development.

Global pressures add urgency to these efforts. Post-pandemic inflation, rising interest rates, and trade disruptions have strained public finances worldwide.

Currency volatility and fluctuating commodity prices make revenue planning increasingly difficult for extractive-dependent economies.

The report warns that without stronger domestic revenue systems, countries may struggle to fund essential services like healthcare, education, and infrastructure. The energy transition adds another layer of complexity. While fossil fuels currently dominate resource revenue, demand for “transition minerals” is growing.

Resource-rich countries must adapt to shifting global markets, balancing investment opportunities with the risks of declining demand for traditional commodities.

According to the IMF and World Bank, the “tax gap”, the difference between what governments could collect and what they actually collect, amounts to hundreds of billions of dollars annually in EITI countries.

Closing even a portion of this gap could fund public services and accelerate progress toward the Sustainable Development Goals (SDGs). T

he report concludes that transparency, sound fiscal regimes, and multi-stakeholder engagement are not just tools for good governance; they are essential mechanisms for ensuring that natural resource wealth is harnessed for the benefit of citizens, now and in the future.

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