Is the EITI relevant for reducing diversions of public revenue? Mozambican experience

The policy brief argues that the Mozambique Extractive Industries Transparency Initiative (MEITI) is largely ineffective because it only monitors payments already made to the state, whereas the most substantial revenue losses occur earlier during fiscal regime negotiations and tax base declarations. The author highlights that secrecy in contracts and mispricing practices lead to far greater losses than the small discrepancies found in MEITI reconciliation reports. The document recommends that the EITI broaden its scope to monitor all stages of the extractive process and improve transparency regarding fiscal regimes and production values.

• The MEITI is considered largely irrelevant in preventing the diversion of public funds because most diversions occur during the negotiation of the fiscal regime and the declaration of the tax base, phases that are characterized by a high level of secrecy.
• Revenue losses resulting from redundant fiscal incentives for a single company, Sasol Petroleum Temane, regarding the tax on company profits, exceeded the total discrepancy found across the entire extractive sector by more than 12 times.
• Estimated losses from mispricing practices—indicated by differences between export values reported by exporters and import values reported by importing countries, as well as reductions in royalties as a share of production—are more than 15 times higher than the payments the government could not justify.
• In 2009, direct payments from extractive companies accounted for approximately 1% of total state revenue. Data for two exporting companies showed that for every $1,000 of exports, only $54 was paid to the state, while $946 remained with the companies.
• The MEITI reconciliation reports for 2008 and 2009 showed that while all 2008 payments were confirmed, the government could not account for approximately $110,651 (about 0.25% of total payments) in 2009.
• The author suggests that senior government figures may have conflicts of interest, potentially obtaining personal benefits such as shares in companies or Board positions in exchange for softening fiscal positions imposed on extractive companies.

APA

Ossemane, R. (2013). Is the EITI relevant for reducing diversions of public revenue? Mozambican experience. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2013/01/Policy-Briefing-61.pdf

Chicago

Ossemane, Rogério. Is the EITI relevant for reducing diversions of public revenue? Mozambican experience. South African Institute of International Affairs, 2013. https://saiia.org.za/wp-content/uploads/2013/01/Policy-Briefing-61.pdf.

Wikipedia

{{cite report |last1=Ossemane |first1=Rogério |title=Is the EITI relevant for reducing diversions of public revenue? Mozambican experience |publisher=South African Institute of International Affairs |date=January 2013 |url=https://saiia.org.za/wp-content/uploads/2013/01/Policy-Briefing-61.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ossemane2013eiti, author = {Ossemane, Rogério}, title = {{Is the EITI relevant for reducing diversions of public revenue? Mozambican experience}}, institution = {South African Institute of International Affairs}, year = {2013}, month = jan, url = {https://saiia.org.za/wp-content/uploads/2013/01/Policy-Briefing-61.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }