Rethinking Tax Incentives in the Mining Sector in Africa

This report analyzes how mining tax incentives are used across Africa. It shows that, despite their widespread use in the continent, mining tax incentives are often poorly designed and overly generous, leading to revenue losses and contributing to illicit financial flows. The authors examine the assumption that tax incentives are key to attracting investment in mining, a sector where location-specific factors such as deposit quality, infrastructure, and political stability may be more important.

The report offers guidance for reform and recommendations including:

• Countries should rethink their tax incentives and eliminate harmful ones. Where offered, incentives should be time-bound, targeted, transparent, and grounded in a demonstrable development need;
• Governments should conduct regular cost-benefit analyses to evaluate effectiveness and strengthen accountability;
• Regional coordination should be enhanced to curb harmful tax competition across the continent;
• Countries should undertake a strategic review of tax policies to align with the Africa Mining Vision, supporting value addition, local industrial development, and sustainable growth.

This report was developed in collaboration with the United Nations Economic Commission for Africa and is designed to support policy-makers, tax officials, development partners, and civil society actors working to strengthen domestic resource mobilization and improve the governance of Africa’s mineral wealth.