Tapping the revenue potential of extractives
Proposals to enhance revenue mobilisation were central to the agenda at the fourth Financing for Development (FfD4) conference, which took place in Seville in early July. The resulting Seville Commitment comes at an opportune time. Domestic revenue mobilisation (DRM) has failed to increase significantly over the past decade, while aid flows are shrinking. New sources of financing are essential to enable public investment in services and infrastructure, and to advance the Sustainable Development Goals (SDGs).
Countries rich in natural resources can scale up revenues by optimising the economic benefits of oil, gas and minerals production. Despite significant potential, these opportunities are not being fully realised in practice.
EITI’s 54 member countries report revenues of between USD 130 and 350 billion from the extractive sector each year. These revenues frequently account for high shares of GDP, overall government revenue and exports. Most EITI implementing countries are classified as resource-dependent. To tap the potential of these resources, such countries seek to balance financing needs with fair systems of taxation. Excessive tax levies can discourage investment and reduce revenue potential.
