SUB NATIONAL REVENUE MANAGEMENT

Transcription

1 SUB NATIONAL REVENUE MANAGEMENT SUB NATIONAL NATURAL RESOURCE REVENUE MANAGEMENT IN CAMEROON: FOREST AND MINING ROYALTIES IN YOKADOUMA, EAST REGION OF CAMEROON Jaff Napoleon Bamenjo RELUFA 2011

2 CONTEXT The Cameroon GESP identifies the mining sector as key to the industrial development of Cameroon Many mining projects are being planned Provision for sub national revenue allocation in the mining sector raises hope The forest sector is pioneer in sub national natural resource revenue distribution in Cameroon -Law no. 94/01 of 20 January 1994 on forestry, wildlife and fisheries regulations introduced AFR payments to councils and local communities But most studies conclude that the outcome from revenue allocated to local councils and communities is mediocre

3 PROBLEM Is the institutional, legislative and regulatory framework in the mining sector appropriate to convert mining royalties to benefits for councils and local communities?

4 THE STUDY A forward looking study on the general framework and management of natural resource revenue at the local level. It uses the forest sector as reference and highlights the existing gaps in mining legislations and institutions which can spur policy makers in formulating future orientation

5 Justification Mining royalty payments so far constitute the best way councils and local communities can benefit from mineral extraction

6 Methodology - Literature review - Consultation of stakeholders at National level - Field data collection - Presentation of findings

7 Mining Royalties Art 89 law no of 16 April 2001 on the mining code The population affected by any mining operation has the right to compensation whose amount is deducted from the ad valorem tax and tax on the extraction of quarry materials Art 137 of law no. 2002/846 PM of 26 March 2002 Revenue obtained from ad valorem tax and tax from extraction of quarry materials is divided and assigned as follows: 25% for the population affected *10 % for local population and 15% for the local council (2) Modalities for the allocation of the share for local population and councils will be defined by a joint order of the minister in charge of mines and minister in charge of finance

8 Mining Royalty Distribution Flow Chart SALE OF MINERAL Tax collected at local or national level DGE/DGI Ad Valorem Tax 2.5% - 8% of mineral value REGIONAL MINING AND FINANCE DELEGATIONS Ad Valorem Tax 2.5% - 8% of mineral value NATIONAL TREASURY 50% of Tax MINISTRY OF MINES 25% of Tax LOCAL ROYALTY 25% of Tax LOCAL COUNCILS 15% of Tax LOCAL COMMUNITIES 10% of Tax

9 Regulatory framework Decree no. 2002/1722/PM of 08 October 2002 creates PSRMEE Instruction n0. 07/004//MINEFI/DGTCFM/DER of 6 March 2007 Revenue destined for local councils and communities is deposited in the coffers of the council treasurer. Service note no. 0001/ MINEFI/DGI /CAB of the 9 th of January 2009 Simply reminds tax collectors of the sharing mechanism in the decree of application of the mining code 25 % for the population, 25% for technical supervision, 50% to the treasury * Absence of the joint ministerial decree a handicap

10 Case of Yokadouma lack of information and sensitization of the beneficiaries on the laws and regulations on payment, sharing and use of mining royalties Interest in annual forest royalty issues

11 Forest Royalties 1994 Forest law introduced AFR 40% council, 10 local community, 50% state treasury Regulatory gap between 1994 to 1998 Joint order MINEFI/MINAT no of 29 April creation of PSRF Joint Order MINTAD/MINFI/MINFOF no. 520 of 3 rd June % council, 20% Feicom, 10% population

12 Unfolding of the study Our interviews in Yokadouma centered around: -Composition and functioning of the local management committees, - Projects executed and methods of choosing them - Inclusion of minority groups and gender considerations, - Control mechanisms, role of civil society, internal regulations of the management committees - Capacity of people in the local council and management committee,

13 Forest Royalties (2ooo-2009) Yokadouma Year Amount TOTAL 8,535,522,362 Source:

14 Outcome Hence, AFR has not led to socio-economic development in Yokadouma -Opaque management of revenue -Local revenue management committees ineffective -Minorities sidelined -Limited capacity in local councils and communities -Lack of control and sanctions mechanism -Overbilling and non transparent contract award process

15 Challenges Coincidence: Mobilong diamond project will generate mining royalties Same mistakes might occur as with forest royalties

16 Needed action Need for a joint ministerial order outlining the allocation and use of mining royalties Need for transparency in collection, allocation and spending of the mining royalties Need for stakeholders to sensitize beneficiaries on mining laws Need for monitoring and sanctions mechanisms to be instituted in pursuing the use of all public funds Respond to the specific needs of indigenous people Reinforce the capacity of the local management committees