NORGLOBAL-Norge - Global partner

From petroleum exploration off the coast to mineral extraction in the interior of the continent, natural resource wealth is potentially an important source of fiscal revenue for African governments. This is particularly important as most African countries face narrow domestic revenue bases in which natural resources take up a significant share. Governments across Africa therefore face the challenge of both developing and enforcing regulatory systems sufficiently robust to ensure that the state receives a fair share of such revenues as well as that industry actors operate in a commercially, environmentally and socially sustainable manner. However, there is growing recognition that Africa loses far more revenues than it receives in aid. This recognition has led to an increasing focus on natural resources and other rents, in particular large-scale loss of revenue due to illicit flows, and there is a growing body of scholarship concerned with this. However, with a few exceptions this literature does not extend to examining the domestic and international interactions that enables the cross-border networks necessary for these illicit flows to take place. African countries seeking to regulate extractive industries and prevent illicit flows through cross-border networks therefore face the combined challenges of constraints on administrative capacity and the prospects of rent-seeking behaviour among political elites. However, the scholarly literature still contains little research on the interactions between national and international economic actors that reinforce these challenges. Our research has therefore examined the formal and informal regulation of cross border flows of natural resource wealth, with a particular emphasis on the cross-border networks that are at the heart of much of the illicit flows in and from the continent. Based on our findings we model these networks as activity that is organised, but without any kind of formal organisation attached to it. This means that we find support for an informal/illicit business model that consists of nodes and networks instead of the typically assumed cartel-like business model of criminal networks. This has important ramifications for policy as well as future research. All work in the field is completed, and we expect that the final results from the project that comes from the collabroation with the University of Bukavu, DR Congo (please note that they have not joined the project as a partner), will be published in late 2018 or early 2019. tThe project has made good use of the SkattJakt network and in particularly the increased collaboration with researchers at CMI. This will continue beyond this project.

African countries seeking to regulate extractive industries and prevent illicit flows through cross-border networks therefore face the combined challenges of constraints on administrative capacity and the prospects of rent-seeking behaviour among politica l elites. However, the scholarly literature still contains little research on the interactions between national and international economic actors that reinforce these challenges. The proposed research will therefore examine the formal and informal regulat ion of cross border flows of natural resource wealth, with a particular emphasis on the cross-border networks that are at the heart of much of the illicit flows in and from the continent. The proposed research will be organised in the three following work packages (WP). 1) Cross-border networks and minerals trade in Eastern DR Congo; 2) Stolen assets recovery and the role of cross-border networks, and 3) Capital flights to tax havens in East Africa.