The Extractive Industries transparency Initiative (EITI) has proffered strategies that resource rich countries can adopt to cushion the effects of the COVID 19 pandemic on their economies.
One of the strategies proposed is for these countries to increase their level of transparency in the management of government finances. Executive Director of the EITI, Mark Robinson advised resource rich countries to embrace contract transparency which is an emerging trend in the EITI to protect citizen’s interests and create a level playing field that benefits countries over the long term.
According to Mr. Robinson, the advice has become crucial given the economic challenges resource rich governments are facing over the fallen crude oil prices.
He emphasised that the pressure created by volatile commodity prices, deals between traders and state-owned enterprises may create avenues for corruption. He advised that commodity trading transparency should not be ignored at any given time as the practice will enable the citizens understand how much revenue is collected from the sales of their natural resources.
“In as much as project postponements and revocations could shorten these revenues, leaving some communities vulnerable or impoverished, transparency can help keep these communities informed about discrepancies and the funds due to them”, the Executive Director reaffirmed.
COVID-19 has posed a huge challenge on the public health system, caused by reduction in the oil prices and resulted in economic hardship to resource rich countries. Many local communities and subnational governments depend on their share of extractive revenues as their source of income.