African governments should publish and review all tax subsidies and concessions given to multinational mining firms to boost resources that could be used for fighting poverty, activists said on Wednesday.
Launching a report commissioned by five grassroots groups and charities working on the world's poorest continent, they denounced Africa's mining tax regimes as a mix of secret and discretionary deals that were not in the public interest.
That meant governments had not benefitted from the boom in global metals prices over the last few years, and were also suffering since demand and prices had begun to fall last December.
Mining contracts and all ... payments made by mining corporations to governments should be opened up for scrutiny as well as subjected to parliamentary oversight and ratification as a minimum measure, said ActionAid researcher Wole Olaleye.
The report, Breaking The Curse, said the secretive way many African governments negotiated contracts with miners -- along with their inability to audit the complex accounts of the firms and their multiple subsidiaries -- were fuelling losses.
It studied the mining sectors of seven African countries: Ghana, Tanzania, Sierra Leone, Zambia, Malawi, South Africa and Democratic Republic of Congo (DRC).
In Ghana gold accounts for 90 percent of exports, but the report said no company had ever paid more than 3 percent in royalties due to tax allowances and lack of revenue collection skills.
If royalties had been paid at the higher rates allowed by law, that would have earned the West African country several hundred million dollars more over the last few years.
In Tanzania, the report said just one miner -- AngloGold Ashanti -- had paid any corporate income tax by the end of last year, a decade after industrial mining began there.
In DRC, it said, the government should have earned about $200 million from the mining sector in 2007. Instead, it said, the authorities reported only $13 million in taxes from miners.
But the activists recognised the global economic downturn made renegotiating contracts all the more difficult. Africa should still be wary of scaring off investors, they warned.
This report is not anti-investment. It is not anti-private sector. It is also not about finger-pointing or blaming, Brian Kagoro, ActionAid's pan-African policy manager, told reporters.
It is about how Africa can move from dependence on foreign aid by enhancing its capacity to raise domestic revenue. (Editing by Giles Elgood)
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