Why is EITI important?

In the effort to translate natural resource wealth into better development for the local population, the EITI sits in the center of the value-chain, focusing on revenue transparency. In resource rich economies, oil, gas and mining companies make payments directly to governments. Normal channels of public accountability are often missing in resource-dependent countries because the government has an autonomous source of revenue not dependent on taxing its citizens.  Government reliance on extractive revenues can result in lower public service delivery, increased opportunities for corruption and higher dependency on the extractive sector. The EITI aims to address this problem by increasing public information, empowering the public to more effectively hold government accountable for resource revenues. Some other benefits of increased revenue transparency include:

  • Improving revenue collection and management processes
  • Creating a more attractive investment climate
  • Building trust between governments, companies and citizens

Providing a forum to discuss broader extractive industry governance issues such as physical and process audits, contracts transparency and sub-national revenues