The World Bank yesterday stated that mining companies could boost economic growth in West Africa by purchasing more equipment, supplies and services from local companies.
The study, entitled: ‘Increasing Local Procurement by the Mining Industry in West Africa,’ according to the bank, showed that raising the share of local procurement by mining companies would spread the benefits of mining more evenly across a country’s economy, creating jobs and stimulating the sustainable development of local enterprises.
The report, which focuses on Ghana, Guinea and Senegal, recommended that West African governments work with mining companies, suppliers, and civil society to strengthen definitions and indicators for measuring local procurement, and that mining companies develop and implement local procurement plans.
“Buying local goods and services is a catalyst for private sector development and sustainable growth,” said Obiageli K. Ezekwesili, World Bank’s Vice President for Africa, and a former Nigerian Minister of Extractive Industries.
“A key message of this study is that mining companies need to be transparent about informing local communities on procurement opportunities, so that these communities can benefit economically from mining operations. Mining companies should not only extract wealth, they must inject opportunity.”
Mining, the bank noted, is an economic engine for West Africa, which supplies about nine per cent of the world’s bauxite, and eight percent of its gold. This contribution is expected to grow, with large gold, iron ore, and bauxite projects in advanced planning stages, along with unexploited uranium, copper and diamond deposits across the region.
“But even if these levels of mining activity involve significant procurement spending, both in capital investment and operational costs, there has so far been only limited participation in mining supply chains by companies based in West Africa.