AfDB’s FIMES project marks success in bolstering transitional economies

General

In a successful effort to propel transitional African economies towards stability and growth, the African Development Bank’s Financial Modelling for the Extractives (FIMES) project has showcased remarkable results, as representatives from eight African countries benefiting from FIMES concluded a final learning workshop in Abidjan last Thursday.

Coming from Guinea, Liberia, Madagascar, Niger, Sierra Leone, South Sudan, and Zimbabwe, the participants shared their experiences around the programme launched in 2020 for two days.

FIMES is a multi-country project funded by the African Development Bank Group’s Transition Support Facility and implemented by the African Natural Resources Management and Investment Centre (ANRC). The project will strengthen capacity for financial modelling and domestic tax revenue mobilisation. It also boosts the institutional capacity and resilience of seven beneficiary transitional countries, Guinea, Liberia, Madagascar, Niger, Sierra Leone, South Sudan, and Zimbabwe.

Acting Director of the African Centre for Natural Resource Management and Investment Vanessa Ushie said FIMES was a pioneering large-scale effort by the African Development Bank to build financial modelling capacity in Africa.

“In all beneficiary countries, the lessons and experiences shared at this workshop indicate that FIMES has supported legislative revisions in the petroleum and mining sector and generated comprehensive knowledge and data on key natural resources, leading to better investment agreements, policy decisions and revenue flows,” Ushie said.

“As we enter an era of uncertainty for fossil fuels, due to climate change and the clean energy transition, it is important to build on the foundations of the FIMES project in beneficiary countries and beyond, deepening financial modelling capacity to support investments for a just transition in Africa,” she said.

Treasury Inspector at Madagascar’s Ministry of Economy and Finance Rakotosalama Tojo Hasina Fanomezana said his country anticipated a surge in mining’s contribution to the national Gross Domestic Product from 4% to potentially 15% within the next three years, thanks to the capacity-building efforts in financial modelling for the extractive sector through FIMES.

Fanomezana said the programme had trained 23 government officials from the mining, customs, and finance sectors, with to improve fiscal and parafiscal policies in the extractive sector. “We recommend capitalising on current achievements through exchanges of good practices and discussions around common problems with other countries,” he said.

Aboubacar Sidiki Diakité, Service Manager at the Guinean Ministry of Budget, Prince Nelson, Director of the Tax Policy Division, Liberian Ministry of Finance and Development Planning and John David Cooper, Director of Policy and Research at the Sierra Leonean Ministry of Mines and Mineral Resources explained how the knowledge gained from FIMES and put into practice enabled the treasuries of their respective countries to generate more tax revenue in the mining sector.

He said FIMES allowed for more informed decisions on tax regimes and to derive value from foreign investment. In South Sudan, the project also helped create opportunities to support economic diversification through increased non-oil investment.

Participants agreed FIMES fortified tax revenues and promoted economic diversification and long-term stability across participating nations, while emerging as a cornerstone for fostering resilience and sustainable development in Africa’s extractive industries amidst global climate challenges.

Yero Baldeh, Director of the Coordinating Office for Transition States, expressed his deep appreciation for the central role of the extractive industry in shaping the growth trajectory of States in transition.

“With dedicated funding from the Transition Support Facility’s targeted support window, the FIMES programme strengthens these economies by addressing revenue leakages, governance mistrusts and institutional gaps,” Baldeh said.

“Improving their financial modelling capabilities is not just about improving transparency and accountability. It is also about creating lasting impact, catalysing private investment and creating space for wealth creation. As we close the programme [at the end of 2023], we proudly celebrate its profound influence in building resilience, developing institutional legitimacy and promoting long-term stability.”

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Source: Ghana Web