ActionAid Liberia Launches Extractives, Climate Research Report on DMR for Climate Financing

On Tuesday, March 18, ActionAid Liberia officially launched its research report on Domestic Resource Mobilization (DRM) for climate financing in the extractive sector. 

The event, held in Sinkor, Monrovia, was attended by key stakeholders in Liberia’s extractive sector, civil society organizations, government officials, International Development Partners, all coming together to discuss the findings of the comprehensive study.

The report, commissioned by ActionAid Liberia, delves into the challenges and opportunities surrounding the extractive sector's role in Liberia's climate financing efforts. With a particular focus on the fiscal regime governing the sector, the research aims to assess the sector's contribution to the national economy, its role in climate change mitigation, and how current fiscal policies can be optimized for a more sustainable future.

Dalitso Kuphanga, the Programs and Policy Manager of ActionAid Liberia, opened the event by thanking all participants for their involvement and emphasizing the importance of the research in shaping the future of climate financing in Liberia.

“We at ActionAid Liberia have been working closely with many of you on various projects, particularly in the extractive sector. This study was commissioned to assess the link between the extractive sector and climate change financing, focusing on key public services such as health and education,” Kuphanga stated in his welcome address.

He went on to highlight the importance of the report as an advocacy tool, particularly for civil society organizations and other stakeholders working to address the extractive sector’s environmental impact and its role in climate financing.

“The report will provide crucial information on policies, issues, and gaps related to climate financing. It will help us understand the extractive sector’s contribution to the economy and its potential to finance climate adaptation and mitigation strategies,” Kuphanga said. He also stressed the collaborative nature of the study, noting that many of the attendees had provided input during the research phase, which ensured the report accurately reflects the realities on the ground.

Ebenezer Nyah, an independent consultant, provided a comprehensive overview of a report focusing on Liberia's extractive sector and its fiscal regime, which plays a critical role in climate financing. He noted that while Liberia is rich in natural resources, with the extractive sector-including mining, agriculture, and forestry-accounting for over 50% of the country's GDP, its contribution to domestic resource mobilization is dismally low at just 16% of revenue.

Nyah attributed this significant disparity to the extensive fiscal incentives offered to investors, designed to attract foreign investment, but which ultimately limit the sector's potential to contribute meaningfully to national revenues and development goals.

In his presentation, Nyah highlighted the concept of tax justice, arguing that those who benefit the most from natural resources should contribute more significantly to the country’s development. He stressed the need for a re-evaluation of the current fiscal policies to ensure that the extractive industry pays its fair share, particularly in light of its substantial environmental impact. He pointed out that the sector contributes to serious issues such as deforestation, pollution, and other environmental challenges, which exacerbate climate change and disproportionately affect vulnerable communities, especially women and girls.

Nyah outlined several pressing concerns related to the extractive sector's impact on climate change, including increased flooding, rising sea levels, and extreme heat. He provided specific examples of communities near mining operations facing dire consequences, such as water contamination, soil degradation, and a decline in agricultural productivity. He further noted the alarming rise in diseases linked to environmental degradation in these areas. 

Nyah concluded with a strong warning: “We cannot ignore the fact that the extractive industry is contributing to environmental degradation. If we do not take action, these negative impacts will only worsen, making it increasingly difficult for communities to adapt to climate change.” His insights call for immediate attention to reform fiscal incentives and policies to ensure that the extractive sector contributes adequately to Liberia's development and environmental sustainability.

“We cannot ignore the fact that the extractive industry is contributing to environmental degradation. If we do not take action, these negative impacts will only worsen, making it even harder for communities to adapt to climate change,” Nyah warned.

Prince Desmond Gaye, the LWEP Project Coordinator at ActionAid Liberia, shared insights into the research framework and methodology. He explained that the study was part of a larger regional project in collaboration with Tax Justice Network Africa, which included research in Zambia, Nigeria, and Zimbabwe.

“The overarching goal of this partnership is to ensure that African countries, including Liberia, have revenue policies in place that maximize available funding for climate action. The extractive policy frameworks must aim to reduce the negative climate impacts of extractive projects while supporting a just transition to a more sustainable economy,” Gaye said.

He also outlined the specific objectives of the research, which included identifying the gaps in Liberia’s current fiscal policies, particularly in relation to climate financing, and advocating for changes that would ensure a more equitable distribution of resources.

“The key is to make sure that the revenue generated from the extractive sector is used effectively to finance climate action. This means addressing the fiscal policies that govern the sector and ensuring that they contribute to long-term sustainable development,” Gaye concluded.

On the other hand, the Environmental Protection Agency, through Professor Benjamin Karmorh, stressed that EPA welcomes recommendations from the ActionAid report and believes the recommendations are properly placed to tackle climate change. This administration was able to establish a climate change desk at the Ministry of Finance and Development Planning. There is an ongoing study at the central bank of Liberia to address the issue of climate change and how do we anchor a climate change desk at the Central Bank of Liberia.

The Chief Technical advisor and UNFCCC focal point, Mr. pointed that Director Emmanuel K. Urey Yarkpawolo signed a No-objection letter for the Green Climate Fund in close collaboration with the Rural Renewable Energy Agency in order to access the Green Climate Fund. In His closing statement, he urged all stakeholders to read the report and support the implementation of recommendations in the report.  

The Ministry of Finance and Development Planning and the Environmental Protection Agency Co-Launched the report. 

In his Launch address, Deputy Minister for Fiscal Affairs, Anthony Myers, expressed his appreciation for the research and its potential to influence policy decisions in Liberia. He acknowledged the crucial role of the extractive sector in Liberia’s economy and the need for a balanced approach to ensure that the industry contributes to both economic growth and environmental sustainability.

“It is a privilege to be here today for the launch of this important report. As Deputy Minister for Fiscal Affairs, part of my role is to ensure that we have a clear strategy for revenue generation, including from the extractive sector,” Myers said. 

He informed the audience that the Minister, Hon. Augustine Ngafuan is going in a high-level meeting on some mineral development agreements currently ongoing negotiations, which make the report event more useful to inform policy decisions. He emphasized the need to strike a balance between attracting investment and ensuring the sector makes a fair contribution to national revenue. 

“If we must meet our commitment to achieve the sustainable development goals, we must reform the way we tax and regulate the extractive sector. We must ensure that future agreements are sustainable, equitable, and benefit Liberians; incentives must be granted only where they yield economic benefits. The Ministry is putting in place an incentive monitoring framework and will be asking all relevant stakeholders to join” Myers added.

The launch of the ActionAid Liberia report marks a significant step towards improving the governance of Liberia’s extractive sector and its contribution to climate financing. By highlighting the gaps in current fiscal policies and advocating for a more equitable distribution of resources, the report provides a valuable tool for civil society organizations, policymakers, and other stakeholders committed to addressing the climate crisis.