Posted on: 11 March 2017
“The GIFF Project partners – the Global Initiative against Transnational Organized Crime and Levin Sources – are proud to release the culmination of many months of discussion and research: Follow the Money: Financial Flows linked to Artisanal and Small-Scale Gold Mining and the accompanying case study Follow the Money: Financial Flows linked to Artisanal and Small-Scale Gold Mining in Sierra Leone. We look forward to seeing what advances can be made through application of the handbook’s tools now that it is ready to use! Do keep in touch and tell us if/how you use it, what you found, and what impact this had on realising your goals.”
Artisanal and small-scale gold mining (ASGM) has largely been dismissed as an economically insigni cant, subsis- tence based activity in Sierra Leone. However, an investigation into the sector reveals that Sierra Leone’s ASGM sector is active, vibrant, and generating significant economic value.
However, most of Sierra Leone’s gold never enters the formal supply chains within its borders. Rather, gold is mined, bought, sold and exported through informal networks that only occasionally and selectively intersect with formal supply and value chains prior to crossing the border. Consequently, the country records minimal gold exports and the Government of Sierra Leone (GoSL) reaps little benefit from the gold sector through formal channels of taxation.
Our investigation reveals that Sierra Leone’s ASGM sector is generating significant economic value. However, gold is mined, bought, sold and exported through informal networks that only occasionally and selectively intersect with formal supply and value chains prior to crossing the border. The informality of Sierra Leone’s gold sector is perpetuated and exacerbated by downstream IFFs.
IFFs are paradoxically dualistic. On the one hand, IFFs linked to ASGM serve a critical economic function, fuelling an informal sector which plays an important role in poverty alleviation and economic development in Sierra Leone. On the other hand, IFFs are facilitating complicated layers of exploitation and victimisation by opportunistic actors along the value chain. Upstream actors who engage in IFFs tend to reinvest profits, thus perpetuating supply chains and financial relationships reliant on informal and illicit activity at all levels.
Any attempt to formalise Sierra Leone’s ASGM sector must acknowledge the complex nature and impacts of IFFs if they are to hope to be successful without further marginalizing vulnerable populations.
- Develop interventions which look beyond the mine site;
- Make a better offer: interventions need to identify ways to create a positive business environment and incentivise to draw ASGM stakeholders into the formal sector and engage with formalisation efforts;
- Make financing options available generally and to ASGM operators;
- Engage in efforts to standardise regional tariff rates; and
- Conduct further investigations.