Overview

  • About 3.5 billion people live in countries rich in natural resources. With good governance, transparent management, respect for community needs and the environment, revenues from extractive industries can have a dramatic impact on reducing poverty and boosting shared prosperity.

    Natural resources play a dominant role in 81 countries, which collectively account for a quarter of world GDP and half the world’s population. Africa alone is home to about 30% of the world’s mineral reserves, 10% of the world’s oil, and 8% of the world’s natural gas.

    But all too often these natural resources have become a source of conflict rather than opportunity. Many resource-rich countries also suffer from poverty, corruption, and conflict stemming from weak governance.

    The World Bank helps countries seize opportunities for development and poverty reduction by focusing on effective extractive industries governance, increasing transparency, improving domestic resource mobilization, and promoting inclusive growth while ensuring local community needs are met and the environment protected.

    Last Updated: Sep 29,2017

  • The Bank’s work in the extractive industries sector focuses on three main pillars that support the overall goals of ending extreme poverty and boosting shared prosperity:

    1) Financial Sustainability: The Bank works with governments to strengthen fiscal regimes, remove subsidies, and improve tax administration and revenue transparency to build resilience to economic shocks and reduce the opportunities for the resource curse. It also helps implement structured financial solutions to de-risk private sector investments, strengthen enterprises, and reinforce public-private partnerships.

    The Bank also works with governments to develop policies for oil, gas, and mining regimes and capacity building for effective management. It starts with supporting capacity building for contract negotiation, and includes developing effective legal and regulatory frameworks, tax and royalty administration and revenue management.

    To ensure effective and transparent revenue management in the extractives sector, the Bank supports the implementation of the Extractive Industries Transparency Initiative (EITI) through technical assistance to countries working to publish and verify company payments and government revenues from oil, gas, and minerals. A total of 51 countries are implementing the EITI standard, of which 49 are eligible for World Bank support.

    By helping governments create an enabling environment, improve sector governance and lower risk, extractive industries can leverage large scale private sector investment through the IFC, a World Bank Group organization focused exclusively on the private sector in developing countries.

    2) Social Sustainability: For effective development outcomes, local communities must actively participate in extractive industries operations from the very beginning, leveraging the industry’s infrastructure, job creation, and small business opportunities to provide long term sustainable development. To that end, the Bank promotes inclusive growth, bringing together diverse stakeholders to ensure accountability and lessen adverse impacts on communities and the most vulnerable people, particularly in fragile areas.

    3) Environmental Sustainability: The World Bank works closely with governments to develop strategic environmental and social assessments to anticipate sector-wide impacts and to incorporate environmental and social priorities into extractive industries’ policies and regulatory arrangements.

    Along with our core lending, analytical work, and knowledge products, the Bank administers Multi-Donor Trust Funds (MDTF) to achieve ambitious development goals:

    The Extractives Global Programmatic Support (EGPS) MDTF supports programs ranging from transparency and governance, to legal and regulatory reform, local economic diversification, strengthening institutions, and social and environmental sustainability.

    The Global Gas Flaring Reduction Partnership (GGFR) is a public-private initiative comprising governments, oil companies, and international institutions working to end routine gas flaring at oil production sites around the world as a way to increase energy access, improve efficiency, and mitigate climate change. GGFR focuses on harnessing associated natural gas to conserve it or put it to productive use rather than wastefully flaring it, which causes millions of tons of CO2 to be emitted.

    Last Updated: Sep 29,2017

  • The Bank is active in the extractive industries in about 70 countries and is the largest provider of extractives-related development assistance by a significant margin. Cumulative investment over the past decade is about $3.3 billion.

    An overview of the World Bank Group’s portfolio in extractive industries is available here.

    Some examples:

    Afghanistan: The Bank is working closely with the government to ensure sustainable development of the country’s natural resources. This includes support for geological exploration, data compilation, and capacity building of various government agencies managing mineral and petroleum resources. The Bank also provides technical assistance to the Ministry of Mineral Resources and Petroleum and supports managing ancient and treasured cultural assets around the Mes Aynak site.

    Guinea: The Bank is helping build systems and capacity to manage the country’s mining sector, including the development of major growth corridors around bauxite and iron ore mines.

    Mozambique: The Bank is supporting sustainable development of new gas resources, including creating the enabling environment and building capacity for a new Liquefied Natural Gas (LNG) industry, along with more mature mining sector reforms.

    Nigeria: The Bank’s Mineral Sector Support for Economic Diversification project is helping the country substantially enhance the mining sector’s contribution to the economy, while strengthening key government institutions and fostering domestic investment in the sector.

    Senegal: The government is receiving capacity building support and technical advice to negotiate oil and LNG contracts to boost investments and foster sustainable gas sector development.

    Sierra Leone: The Bank is providing support for small-scale mining as well as operationalizing the entire regulatory chain for minerals.

    Togo: The Bank’s Mining Governance and Development Project streamlines the institutional framework of key government agencies involved in the extractives sector to strengthen efficiency and accountability for effective management of the sector. The Bank is also helping artisanal and small-scale mine operators develop skills and raising awareness in communities affected by mining.

    A new World Bank report says the continuing boom in low-carbon energy technologies will greatly impact demand for many minerals and metals in the years to come. The Growing Role of Minerals and Metals for a Low-Carbon Future also says the shift to a low-carbon future will provide opportunities for mineral-rich countries, but they will need to ensure their long-term strategies enable smart investment decisions.

    The World Bank-introduced “Zero Routine Flaring by 2030” Initiative commits governments and oil companies to (a) not routinely flare associated gas in new oil field developments and (b) to end existing (legacy) flaring as soon as possible and no later than 2030. As of September 2017, over 70 governments, oil companies, and development institutions have endorsed the Initiative, accounting for over 50% of global gas flaring.

    The Bank’s Mining Investment and Governance Review (MInGov) provides access to policy and institutional analyses that affect the sustainable development of the mining sector, including the investment climate, effectiveness of public institutions in developing and monitoring the sector, and costs and benefits to stakeholders. Investors, companies, and other sector stakeholders benefit from access to country-specific governance data, and policies and practices that affect investment risk and decision-making in the sector.

    Last Updated: Sep 29,2017

  • To achieve sustainability goals and improved governance in extractive industries, which are important drivers of economic growth and poverty reduction in many developing countries, the World Bank has developed partnerships with a wide range of organizations in the sector. This helps align efforts, while also leveraging resources and expertise to end poverty and boost shared prosperity.

    Last Updated: Sep 29,2017

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In Depth

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Zero Routine Flaring by 2030

This Initiative brings together governments, oil companies, and development institutions who agree to eliminate the practice by 2030.

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Gender in Extractive Industries

Evidence suggests women often bear an unequal share of social, economic and environmental risks tied to extractive industry projects.

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Artisanal and Small-Scale Mining

Explore what the Bank does to promote sustainable livelihoods through artisanal and small-scale mining.

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Governance of Extractive Industries

A space for dialogue, innovation and collaboration for those working on extractive industries governance and transparency.

Additional Resources

Contacts

Washington, D.C.
Zubin Bamji
zbamji@worldbankgroup.org