The governance of extractive resources remains a central issue for countries rich in oil, gas, or minerals. Contracts signed with international companies determine the distribution of revenue and directly influence a state's ability to finance its public spending. In some African countries, hydrocarbon revenues represent between 20% and 40% of tax receipts, which exacerbates the vulnerability of budgets to fluctuations in global prices.

Adds vigilance regarding the quality of tax regimes and the structuring of contracts in line with the African Mining Vision (AMV), which promotes progressive tax frameworks, balanced production-sharing clauses, and local content obligations backed by rigorous impact assessments. Integrates EITI standards for the proactive publication of contracts and beneficial owners to foster trust and accountability.

Price volatility creates cycles of abundance followed by periods of contraction, complicating economic planning and the continuity of public services. Between 2018 and 2024, some producing countries saw their oil revenues fluctuate by more than 50% in a single year, illustrating the extreme sensitivity of their fiscal balance. The implementation of stabilization instruments, such as sovereign wealth funds or benchmark price management mechanisms, can mitigate these effects and smooth public spending.

A key distinction is that these instruments only deliver results if they are governed by explicit counter-cyclical rules (prudent reference price, structural balance) and independent governance. VMA/EITI proposals should be integrated, along with a budgetary rule capping annual oil expenditures, a clear legal mandate for the fund (savings and stabilization objectives), quarterly published external audits, and open-data reporting on deposits and withdrawals.

Transparency in contracts and strengthened oversight institutions are essential to mitigating the risks of misallocation and corruption. When information on production volumes, prices, and financial transfers is accessible and verifiable, governments can better prioritize investments, debt repayment, and savings accumulation.

Strengthens with the EITI, systematic publication of contracts and annexes, disclosure of beneficial owners of companies, traceability of payments by project, and independent reconciliation. Aligns supervision with the VMA, multi-stakeholder committees, mandatory environmental and social audits, and mechanisms for community participation in decisions and benefits (local development fund, market quotas).

Prudent and inclusive management of extractive resources can transform this natural wealth into a sustainable engine of development. Countries that can diversify their economies, invest in infrastructure, education, and health, and stabilize revenue cycles through appropriate financial instruments, increase their chances of converting extractive resources into sustained economic growth and social resilience.

Add the social and environmental dimension, make disbursements conditional on education/health indicators and ecological standards (VMA), and integrate clauses for site restoration and externality management. Operational proposals include a diversification strategy supported by cross-sectoral "performance contracts," local content measured and reviewed every two years, and an EITI transparency framework extended to subsidies and exemptions to capture the full benefits.