The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Can 1 percent make a difference in Burkina Faso?

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Citizens of Kalambaogo, a town north of Burkina Faso's capital of Ouagadougou, gather for a group photo in 2012. Nearly a thousand villagers there had participated in an Oxfam "cash for work" program to help them survive the food crisis. Photo: Andy Hall / Oxfam

This week’s demonstrations in Ouagadougou show that devoting even the slimmest portion of mining revenues to basic services would be a good start.

Chris Hufstader is the Creative Manager at Oxfam America, specializing in extractive industries.

All eyes are on West Africa right now, and just to the west of the three countries hit hardest by Ebola – Guinea, Sierra Leone, and Liberia – Burkina Faso too has been trying to get more money to devote to basic services and poverty reduction. This week Burkina Faso’s citizens demanded a major change. Protestors shut down the capital Ouagadougou on Tuesday, then burned the Parliament and took over the state TV station on Wednesday and Thursday. Today, after 27 years, President Compaore resigned.

The good news is that the money is there to fight poverty in Burkina Faso. Last year the country generated $390 million from gold mining at about eight different active mines. There is potential for more: Right now companies around the world are looking for funding to exploit dozens of recently discovered deposits in Burkina Faso. One Canadian company predicts that it will produce a 212 percent internal rate of return. (That’s after taxes.) Another company describes the country as having a “stable elected democratic government” and “clear taxation policies.” (I wonder if they will be revising their statement after events this week in Ouagadougou?!)

But despite being the fourth largest producer of gold in Africa, nearly half of the 16.8 million Burkinabé citizens live in poverty. Burkina Faso is one of the poorest countries in West Africa, and ranks among the 10 poorest countries in the world.

Mining companies and their friends in the now-stalled Burkina Faso legislature torpedoed attempts last year to revise the mining code and increase the share of revenues they have to pay for community development from 0.5 percent to one percent. Oxfam has been supporting people in Burkina get that one percent this year, and is working with the Publish What You Pay coalition to help mobilize Burkina Faso citizens to support the one percent proposal through social media, as well as newspaper, radio, and television ads:

A rough English translation of the script reads:

Gold is being mined in Burkina Faso.
Gold must shine for all of us. Our communities also have the right to pursue happiness.
We’re urging mining companies to devote one percent of gold revenues to pull our citizens out of poverty.
Ask parliament to vote for the new mining code with one percent for the benefit of Burkina’s people.
More equity and justice for our people, that’s the goal of our campaign.

insert-presse-ecrite-burkina-faso

Fighting for basic services essential

Burkina needs this one percent to pay for schools and hospitals. The Ebola outbreak is a particularly glaring example of why poor countries with mineral wealth need to invest at least a little of it in poverty reduction. And the key part of fighting poverty is questioning government policies and budgets that fail to devote resources for basic services.

There has never been a lot of political space to push for change in Burkina Faso, but that may be changing. The situation in Ouagadougou is chaotic, but I hope the discussion can get back to the one percent question soon.

Getting a new government in place, and then giving it more money, is no guarantee that mining revenues will be well used. But passing a law to get the money is a good place to start. Obviously right now, the campaign will wait and see how recent events shape the future of governance in the country.

If the revenue from the mining sector can eventually get to where it is needed most, Oxfam’s civil society partners and others can help citizens to monitor how it is spent, putting the government on a path to accountability. This takes training, and building a sense that the government is answerable to its citizens and that those citizens deserve to enjoy a fair portion of the nation’s wealth.

Every person has the right to demand that their government takes steps to end poverty. This week in Ouagadougou, citizens are exercising those rights.

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You can follow the Burkina Faso campaign on twitter through the hashtag #just1pourcent and news on the protests using #Iwili. Share it with your friends so more people know about this struggle.

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  1. gr8wightweh@gmail.com'William Hayes

    Is there an MDG-based differential diagnosis for Burkina Faso? An MDG-based sustainable development plan? What do they show about (shared) responsibility for the problem this post highlights?

    Reply
  2. pkw.burkina@gmail.com'P Williams

    Dear Chris

    Thanks for your article, which appears to be a little biased, if not misleading.

    The Gold Industry free carries the government of Burkina Faso 10% by existing legislature in the Gold Mining project/s, and pays 3-5 % Royalty (depends on gold price), and employs and train employees, and most have an active program of creating positive change in the local community around the mine site. (the issue of returning benefits to the local site from the central government is also an issue in such places as Finland, and in Australia, various South American states, so Burkina is not alone).

    The gold mines in Burkina are generally of a low grade, and hence not overly profitable, especially in the current gold prices. Imposing more costs, could result in 1% of nothing, if one is not careful. ).5% is probably doable, and this is in addition to what they already contribute. There are currently about 2,000 students enrolled in Geology courses in the University of Ouagadougou, all with a strong desire to be part of a vibrant local industry.

    Not withstanding this, the proceeds from Gold Mining to the Burkina Faso Government was reported to be $390m last year, and about 20% of GDP. One can inspect the last report to Transparency International Org, of which Burkina is a member

    It is up to the central government to apportion some of the income from their share of the proceedings, whether they be direct equity payments, or royalty payments, back to the local community.

    You can see the efforts of some of the gold companies operating in Burkina Faso, like Semafo who have in essence a social charter which they report on.
    http://www.semafo.com/our-commitment.php

    What is happening in Burkina Faso, is not chaotic, but rather a regime change by popular action. The President was forced into abdication, principally because he refused to heed the many warnings he got from the popular mass about his seeking to change the constitution so he could be re-elected for yet another term (already 27 years). The National Assembly was dissolved, and many fled the country, which then meant , by the Constitution of the country, the army took charge in a transition mode. A civil transition government is being appointed which led by a prominent person, to be nominated.

    Rather than take this line in your article you should be taking a more positive action of making people aware of far more significant matters

    1. The very odious debts, and their full nature and impact on African communities and how they entrench poverty. ” Africa’s odious debts: foreign loans and capital flights bled a continent”…Ndikumana and Boyce
    Appalling story, and terrible impact. Continuing today.

    2. “Poisoned Wells: The dirty politcs of African Oil”…by Shaxson.

    3. “Treasure Islands’ by Shaxson again, on the well trodden path of grand scale theft in the name of transfer pricing and tax evasion.

    in my experience these are the matters that people should focus on, every day, until they are removed .

    P

    Reply
    1. chufstader@oxfamamerica.org'Chris Hufstader

      Thanks to W. Hayes and P. Williams for your comments; I have not been following the MDGs nor Burkina’s plan to meet them, perhaps another reader can enlighten us?

      RE gold mining, I will confess to bias in that I would like to see countries like Burkina devote more money from mining revenues to community-level development, and I would prefer this to be done by the government as opposed to the industry-led initiatives (which are well meaning but might not always be sustainable). Government has a duty to promote development. I would also prefer to see an ECOWAS-wide standard for devoting mining revenues for such purposes so as to discourage a race to the bottom across the region. I appreciate your concerns about accountability and transparency in the mining and oil sector in Africa, my colleagues blog on those subjects quite a bit so please read their posts if you are interested.

      Reply

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