This initiative aims to establish a partnership between the mining sector, the UN system and the Guinean Government in order to develop a programmatic framework to map, communicate and fund local initiatives geared towards enhancing the development impact of mining operations in the country. Guinea’s Chamber of Mines, a key actor in this initiative, will have its capacity reinforced to play an intermediary role between all the involved stakeholders.
One of Africa’s poorest countries, Guinea is ranked 175th of 189 countries according to the Human Development Index. More than 55% of Guinea’s 10.5 million inhabitants live with an income of less than US$1.90 per day. Mining is the predominant economic sector, based on the large-scale extraction of bauxite, aluminium and gold, and represents about 13% of the GDP. However, mining operations leave behind environmental damage and often create social tensions. Indeed, mining requires machinery and skills that are not locally available; therefore jobs for indigenous people often have low remuneration. Hence, whilst mining operations contribute to aggregate GDP, they do not always foster local development and can sometimes even harm local economies. A major factor limiting the mining sector’s contribution to local wealth is the absence of financial instruments to support access to domestic finance for project sponsors.
The objective of this project is to strengthen the capacity of Guinea’s Chamber of Mines to play an intermediary role between the mining industry, the UN system and local governments in order to develop a robust and innovative partnership to realize greater development impacts. The project will develop a programmatic framework focused on issues of common concern, such as climate change adaptation, which cannot be addressed solely by individual mining companies at the local level and require a national-level engagement. At the same time, tackling such issues must be factored into all initiatives to offset the negative impacts of the exploitation of natural resources through mining activities. The framework will also enable partners to address challenges related to the development of skills and the creation of local employment opportunities through local content in mining supply chains at a sector-wide level. Further, the project will assist in preparing a communication plan to engage with all relevant stakeholders (including local communities), to build awareness about the joint vision for the development of the Guinean mining sector, corporate social responsibility and local-content obligations of mining companies, as well as the structures in place to put these into practice. It will inform the concerned stakeholders about the objectives, actions and expected impacts at both local and sector levels, including the alignment with the achievement of the Sustainable Development Goals.
Building on the achievements of an earlier programme (“Support for improved governance of mining royalties” – AGREM), which focused on the promotion of inclusive, transparent and accountable practices in the management and use of resources at the local-government level, the project will also set up a local-development fund, capitalized from the mining industry’s contribution with additional support from the UN system and development banks. The local-development fund will finance strategic investments aligned with the programmatic framework, with high local-development potential, using a range of financial instruments: matching grants, revolving grants for private initiatives, public-private partnerships etc. When possible the investments will be used to leverage contributions from other stakeholders such as the Government, local communities and donor-funded development projects.
Extractive industries represent an important part of the economy in Africa and initiatives that can make this sector more socially and environmentally responsible can add value to a more inclusive development. The project will contribute to this end by generating and testing a new funding stream to invest in local development. Through enhanced South-South Cooperation within the region, this project can provide a model for replication in African countries in which the mining sector accounts for a large share of the GDP (such as Burkina Faso, Mali, Niger and Senegal).
Provider Country: Guinea
Beneficiary Country: Guinea
Supported by: UNDP
Implementing Agency: UNCDF and UNDP Guinea
Project Status: On-going
Project Period: From end of 2018 to end of 2019