CAMION EN MARCONA
Copyright© GIZ/Rolando Suaña
LION in West Africa
In many West African countries, the extractives sector, especially the gold sector, plays an important role in national economic ambitions. The mining procurement market is essential here, as procurement expenditure is often higher than personnel and tax expenditure combined. LION tries to contribute to an enhancement of the share of locally procured goods of mining companies to increase local value addition. To this end, LION estimates procurement expenditure (divided into the most important procurement items) in order to provide local decision-makers and suppliers with information that underlines the importance of local procurement. With the help of LION, decision-makers can thus develop evidence-based local content regulations that can increase the share of local procurement. Such an increase makes resource-rich countries less dependent on price and demand fluctuations, which can lead to more sustainable economic development.
The different institutional, economic and regulatory conditions of the countries in West Africa lead to differences in the extractive industry's needs for supply products. Ghana's gold sector is one of the largest in West Africa, so Ghanaian mines' procurement expenditure dominates in many categories. The low level of electrification and lack of connection to the central power grid in the countries of Mali and Burkina Faso result in high expenditure on fuels and lubricants for power generation. In contrast, direct expenditure on electricity is correspondingly low.
The top spending categories in the West African gold mining procurement market are led by:
(1) Fuel and lubricants for energy supply
- Burkina Faso: USD 359 million
- Mali: USD 226 million
- Senegal: USD 62 million
- Guinea: USD 40 million
(2) Fuels and lubricants for mining
- Burkina Faso: USD 176 million
- Ghana: USD 144 million
- Mali: USD 74 million
- Guinea: USD 53 million
(3) Reagents
- Ghana: USD 156 million
- Burkina Faso: USD 156 million
- Mali: USD 82 million
- Guinea: USD 50 million
(4) Spare parts and operational expenditures
- Ghana: USD 139 million
- Burkina Faso: USD 123 million
- Mali: USD 70 million
- Guinea: USD 42 million
(5) Grinding media
- Ghana: USD 88 million
- Burkina Faso: USD 85 million
- Mali: USD 46 million
- Guinea: USD 27 million
(6) Explosives and accessories
- Ghana: USD 84 million
- Burkina Faso: USD 79 million
- Mali: USD 46 million
- Guinea: USD 25 million
(7) Electricity
- Ghana: USD 193 million
- Côte d’Ivoire: USD 49 million
- Guinea: USD 40 million