Unveiling the invisible: Combating corruption in Togo's extractive sector

Togo is making strides in combating corruption in its extractive sector. In a recent project, EITI Togo, with the leadership of the NGO ACOMB, used the NRGI corruption diagnostic tool with the aim of identifying and addressing key corruption risks in how the mining sector is managed. EITI Togo’s thematic report provides an overview of three key areas of concern, along with concrete recommendations to address each risk.

Risk 1: Opacity in state participation in mining companies

One of the most alarming discoveries was the ambiguity surrounding the state's participation in mining companies. By law, the Togolese government holds a free 10% stake in mining companies. However, an analysis of the companies' financial data in Togo’s 2021 EITI Report revealed inconsistencies—many companies could not confirm the state's participation. This lack of transparency raises suspicions of potential corruption and underscores the need for rigorous verification processes.

To address this issue, the Ministry of Mines and Energy resolved to verify the state's participation in these companies before publishing future EITI Reports. Ensuring that the state's participation is accurately reported and transparent is essential to maintaining public integrity and trust in the sector.

Risk 2: Questionable equipment rental practices

The diagnostic also highlighted questionable practices involving the rental of equipment in the mining industry. A Togolese company had signed a heavy equipment rental contract with a foreign entity, with payments totalling over 4 billion CFA francs (about USD 8 million) over seven years. These payments, which seemed excessive relative to the services provided, were accompanied by suspicious cash withdrawals by individuals close to the company's executives, raising suspicions of corruption and money laundering.

In response, authorities initiated a sectoral assessment of money laundering and terrorism financing risks related to the mining sector. This assessment, in line with international recommendations, aims to strengthen controls and ensure that financial transactions in the extractive sector are transparent. Implementing these measures will help prevent illicit financial flows and enhance the sector's financial integrity.

Risk 3: The labyrinth of beneficial ownership

Another significant risk identified was the confusion around beneficial ownership, the real beneficiaries of companies. Several institutions were involved in managing this information, often without coordination, leading to a lack of clarity and potentially to hidden interests or conflicts of interest. The lack of consistency in this approach can shield corruption, as the real beneficiaries can hide behind complex legal structures.

To remedy this, the Business Climate Unit of the Presidency facilitated collaboration between the concerned institutions, ultimately assigning the responsibility for managing beneficial ownership to the Trade and Personal Property Credit Register (Registre du Commerce et du Crédit Mobilier). This centralisation, accompanied by increased transparency and strengthened cooperation, aims to close gaps that enable corrupt practices. Strengthening these measures is vital to ensure that all actors are held accountable and that the sector operates with greater integrity.

Moving forward

The fight against corruption in Togo's extractive sector is far from over, but the measures taken by EITI Togo and its partners, as well as the work of civil society in monitoring public policy under the leadership of the NGO ACOMB, are significant steps towards a more transparent and equitable industry. By addressing these key risk areas and implementing the recommended actions, Togo lays the foundation for a future where its natural resources benefit all its citizens, free from the shadows of corruption. Together, with continued vigilance and collaboration, Togo can build a mining sector that is both prosperous and fair.