Latest news with #MansaMusa
Daily Maverick
25-05-2025
- Politics
- Daily Maverick
Secret to turning Africa into the land of gold and honey it once was
During US President Donald Trump's recent tour of the Gulf States – Saudi Arabia, Qatar and the United Arab Emirates (UAE) – I was reminded of two legendary African figures, Prester John and Mansa Musa. While Prester John was a fictitious character from medieval Europe, imagined as a powerful Christian king in Ethiopia, Mansa Musa was a real historical figure – the actual ruler of the Kingdom of Mali in the 14th century –known for his immense wealth. The land of Prester John, believed to be in present-day Ethiopia, was described in glowing terms in a 14th-century map: 'In the woods of this Abassia, there is such a great quantity of honey that they do not bother to collect it. When winter arrives and the heavy rains wash these trees, the honey flows into nearby lakes, and, thanks to the sun's warmth, that water becomes like wine, which the people of the area drink instead of wine.' An inscription on an unrelated 14th-century map depicting Mansa Musa echoed this sentiment: 'This Black Lord is called Musse Melly and is the sovereign of the land of the black people of Gineva (Ghana). This king is the richest and noblest of all these lands due to the abundance of gold extracted from his territory.' These descriptions illustrate how Africa was perceived by the world in the 14th century. In stark contrast to today, where the continent is viewed as one of backwardness and underdevelopment – associated with wars, poverty – the real Third World. What has happened to the Abyssinia of Prester John? Where is the Mali of Mansa Musa? Where is the honey flowing in the rivers of Abyssinia? Where is the gold of Mali? Countries in Asia, including the Gulf states, that have experienced a history similar to ours have demonstrated that it is possible for a nation to overcome underdevelopment. If approached correctly, this goal can be achieved within a generation, specifically within a span of 30 years. History provides valuable lessons to learn from, but it should not become a prison where you confine yourself like a caged bird, spending your days, years and decades lamenting your situation and dwelling on the wrongs that others have committed against you. Our friends in Asia have challenged four political economy assumptions that have constrained our thinking in Africa since independence. First, the belief that we cannot overcome our colonial inheritance; that our neocolonial and dependent condition is permanent, leaving us doomed forever. Second, the notion that no country can prosper and become an economic heavyweight without exploiting others. Third, the idea that a country cannot escape its colonial legacy without significant financial support from an external benefactor. Finally, the misconception that natural resources are a curse rather than a blessing; that they will bring wars, political instability and a cycle of coups – a belief that these resources will never truly belong to us but to foreigners. We often attribute Africa's lack of progress since independence to several factors, many of which also apply to Asia. These factors include neocolonialism and the influence of former colonisers, civil wars, the impact of the Cold War and colonial partition. The only significant difference is the Atlantic slave trade, which affected our continent but not Asia. The three Gulf States are unlikely candidates for success. They lack the regime types that Africa has been taught since independence are necessary for development. Additionally, they inherited a desert at the time of independence and do not have a manufacturing powerhouse like China. They also lack the military strength of Russia and the large population sizes of Brazil, India or China. If they were to take an exam based on the textbook lessons Africa received since independence regarding development, they would fail miserably. Africa has been lectured on the dos and don'ts of becoming a prosperous continent. We were given prescriptions complete with indices, scorecards, and key performance indicators to guide us in creating successful nations. Our mentors came from outside our continent. This experiment has failed. The Gulf States demonstrate that there is no magic wand to wave to achieve development, complete with roads and skyscrapers. There is no secret recipe known only to a select few that is passed down through generations. There is no hidden door leading to a wonderland like something out of a Hollywood movie. The answers to what a nation should do to prosper have always been in plain sight, right before our eyes. The answer is: there's no better path to development and prosperity than the one that you must choose yourself. Your mentor is not a development expert from overseas with spectacles, carrying a laptop, but the lessons you must draw from history. Your textbook is in the pages of what history has taught you. Your prescription is simple: be authentic. Trust yourself. Listen to your inner voice. Let's take the example of the UAE, our favourite shopping destination. When the country gained its independence from Britain in 1971, it had no infrastructure, just the surrounding desert. There was little vegetation, and the climate was characterised by scorching heat. The economy relied primarily on date farming and diving for pearls. At that time, the most dependable mode of transport was the camel. In 1971, when the UAE became independent, most African countries had already achieved theirs, except for Portuguese colonies and a few nations in Southern Africa. This included all of North Africa and all former French colonies. Central Africa, comprising the Democratic Republic of Congo (DRC), Rwanda, Burundi and the Central African Republic, was also independent, as was Sudan. Many of these countries were better endowed by nature than the UAE, which primarily benefited from its oil reserves. Africa Month The question that should concern us as Africans this Africa Month in 2025 is why a country like Sudan, which is 15 years older than the UAE, is still at war 69 years after its independence. Similarly, why is the DRC, 10 years older than the UAE, still facing conflict 60 years after gaining independence? It cannot be solely owing to natural resources, as the UAE has its oil. It also cannot be attributed to Western powers, because no Westerner is holding a gun on the streets of Goma or Khartoum, shooting at our people. It is us who are killing each other. The gap between Africa and the three Gulf States has widened since independence, particularly over the past 30 years. It could widen even further unless Africa acts quickly. No African country has a trillion-dollar economy like Saudi Arabia, and none is in the top 10 globally. The largest economies are the US, China, Germany, Japan, India, the UK, France, Italy, Canada and Brazil, representing the Americas, Asia and Europe, but not Africa. CNN reported in the build-up to Trump's Middle East tour: 'In March, the UAE announced a $1.4-trillion investment plan [in the US] over 10 years focused on AI, semiconductors, manufacturing and energy. Its existing US investments already total $1-trillion, according to its embassy in Washington.' No African country can match this. In 2024, Africa's total gross domestic product (GDP) was estimated to be $2.8-trillion, representing the combined economic output of 1.4 billion people across its 54 countries. The combined GDP of Saudi Arabia, Qatar, and the UAE is projected to be about $2.06-trillion by 2025, with a total population of about 47.3 million. To put this into perspective, these three countries, with a population of about 48 million, generate a GDP of more than $2-trillion. In contrast, Africa, with 1.4 billion people spread across 54 countries, produces a GDP of only $2.8-trillion. Our race as black people is not the cause of our challenges. The two regions that have struggled after gaining independence are Latin America (descended from Spanish and Portuguese settlers) and Africa. It took Latin Americans more than 100 years after their independence to organise their countries effectively. In Africa, we are approaching 70 years since independence. One obstacle to the success of Latin America was the destructive interstate and intrastate wars fought among Spanish American nationalists. We Africans have three problems. We don't believe in our agency. We are victims of continuous negative self-talk – a favourite pastime of some celebrity public intellectuals. And we are the ones who give Africa a bad name. We have conditioned our subconscious to believe that we lack agency, viewing ourselves as mere victims of history, subject to the whims of powerful countries and the actions of influential transnational non-state actors. However, our friends in Asia have demonstrated that, regardless of colonial legacies, individuals and nations possess agency. The key question is: what do you do with that agency? Despite any neocolonial structures or geopolitical constraints that may hold you back, there is still room for manoeuvre. How can you best use it? Our leaders have their agency but some of them use it differently: sometimes to resolve political differences with their adversaries through military means. Understanding the principle emphasised by top-performing athletes is valuable: a game is not only won on the field but also in the mindset. A negative mindset often leads to persistent negative self-talk, a pattern we frequently master. Afro-pessimism is one example of this negative self-talk. If you want to hear negative perspectives about Africa, just spend time with some Africans. Our mindset, the names we use for ourselves and the negative things we say shape who we become. A few factors can significantly affect countries. First, having a strong sense of history and a connection to historical continuity is crucial. Second, embracing ideas as a foundation for society's success and prosperity, along with a clear development philosophy, is essential. Third, the importance of strong institutions cannot be overstated. Finally, there should be an emphasis on excellence; practising meritocracy and striving for excellence in all endeavours is vital. Finally, pay attention to leadership – the secret ingredient to the success of Asia. Leadership isn't about how leaders are dressed, but rather about their posture towards society. When we examine leadership, we often focus too narrowly on its form and characteristics, overlooking two key components: 1. What leaders do when they hold state power, regardless of how they obtained that position – whether through election, heredity or a coup. Do they invest in building schools or do they misuse state resources for personal gain or to settle scores with their enemies? 2. How they relate to society and their own people. Do they oppress their citizens, look down on them, or do they serve them? Do they boast and show off that 'I have arrived'? DM
Canada News.Net
02-05-2025
- Business
- Canada News.Net
Westerners came for gold. Now this nation is sending them packing
For Mali, achieving sustainable sovereignty goes beyond winning compensation disputes with foreign companies its also about strengthening the regulatory framework and local expertise in gold mining Over the past two years, Mali has been steadily tightening its grip on the gold mining sector while justifiably increasing pressure on foreign investors, including the leading Canadian mining company Barrick Gold. In mid-April, the company's office in Bamako was closed due to a tax dispute. The results of this policy are already evident: in 2024, Mali received 40% more payments from gold mining companies, totaling $1.4 billion. In the long run, such policies could significantly strengthen macroeconomic stability and serve as a model for other countries in the Sahel region and across Africa. Golden identity Gold is an integral part of Mali's historical and economic identity. The country is often associated with the image of Mansa Musa, the 14th-century ruler of the Mali Empire, known as one of the wealthiest individuals in history. His legendary pilgrimage to Mecca was marked by the lavish distribution of gold which, according to legend, even affected the region's economy. Estimates of how much gold Musa took on his pilgrimage vary widely, ranging from more realistic figures of around half a ton to fantastical claims of up to 20 tons. Today, gold remains crucial to Mali's economy, accounting for 7% of GDP and serving as a vital source of foreign currency and export revenues - making up three-quarters of the country's total exports by value. During the colonial era, gold mining in Mali was primarily carried out using artisanal methods. Industrial mining began to develop only after the country gained independence, as the Malian government recognized gold as a means to diversify an economy largely dependent on agriculture and cotton exports. The Soviet Union was a significant contributor to the development of Mali's gold mining sector. In 1984, the USSR helped launch the Kalana mine which produced half a ton of gold annually. Beyond technical support, the USSR helped establish a national geological school in Mali and promoted the development of the processing industry. How much gold is there? Today, Mali's gold reserves are estimated at nearly 900 metric tons, and are primarily concentrated in the southern and western regions of the country. Alongside South Africa, Ghana, Tanzania, and Sudan, Mali stands as one of Africa's leading gold producers, with an annual output of 50-60 metric tons. Major players in the field include Barrick Gold (operating the Loulo-Gounkoto mine) and Resolute Mining (Syama mine). While most of the production is conducted through industrial methods, an artisanal gold mining sector also exists, particularly in northern and southwestern Mali. It is often linked to illegal activities - such as smuggling and financing terrorist groups - that continue to pose a threat to regional stability. Mali became a key player in the global gold market during the 1990s, as foreign investors entered the sector amid market reforms. Within a decade, these investors increased production thirty-fold, reaching 30 tons by the year 2000, and later boosted it to 50 tons. Liberal reforms: cui bono? The period of increased gold production coincided with legislative reforms carried out in 1991- 1999 with the help of the World Bank. These reforms were characterized by a liberal approach, offering foreign investors tax deductions and exemptions for certain categories. For example, a law enacted in 1991 exempted investors from all taxes for the first five years of production. This led operators, driven by the quest for windfall profits, to extract as much gold as possible at the expense of Mali's ecology and long-term interests before tax obligations kicked in. The subsequent reforms were also inconsistent. As a result, Mali's government missed out on significant tax revenue due to numerous exemptions and foreign operators underreporting their production, exports, and profits. Consequently, the industry remained export-oriented and did not meaningfully contribute to Mali's socio-economic development. Like many developing nations where mining is largely "delegated" to foreign investors, Mali's government passively collects income from the gold sector through a mix of fiscal tools: royalties (a fixed fee per tonne extracted), corporate income tax, special levies (for licensing or license renewals), dividends from state holdings in mining ventures, and export tariffs and licenses. Thus, the government's revenues heavily depend on foreign companies and, crucially, on the regulatory environment - whether regulators can compel these companies to pay what they owe and whether they have the means and will to verify the data submitted by mining operators. What the tax disputes are about In Mali, as in many African countries, it's common for foreign companies to underpay taxes, leading to frequent disputes. Every five to ten years, the government conducts an "audit" of the sector and assesses back taxes owed by foreign companies. Often, the government lacks real tools to determine how much has gone unpaid, making precise amounts subject to negotiation between regulators and investors. Typically, a company agrees to pay a certain sum in exchange for the right to continue operating in the country. This serves as an informal version of a windfall tax. For example, in the mid-2010s, ExxonMobil faced a $74 billion fine for unpaid taxes in Chad, while in 2019, Canadian firm Barrick paid $300 million to Tanzania to resolve a tax dispute. A similar situation has unfolded in Mali. Following the 2020 coup, the new authorities shifted toward gradually sovereignizing the economy and reducing reliance on external borrowing. In this context, gold presents the primary and most straightforward opportunity to boost the budget. In 2023, Mali introduced a new mining code aimed at increasing sector revenues. This legislation raised royalties from 6% to 10.5% and increased the state's and local private investors' shares in projects from 20% to 35%, along with the removal of several tax incentives. In 2022, revenues from the sector reached 763.7 billion CFA francs ($1.3 billion), but by 2023, they had fallen by 26%. Despite a 23% decline in industrial production in 2024, government revenues soared to a record $1.4 billion, according to Reuters. This increase was driven by higher taxes and payments from foreign companies. The new mining code marked a significant shift in the Malian government's approach to the sector and set the stage for a conflict with Canadian company Barrick Gold - the world's second-largest mining company and the main investor in the mining sector. Following an audit of the period from 2020 to 2022, Malian authorities accused Barrick of underpaying taxes and dividends, demanding over 300 billion CFA francs (approximately $512 million). Barrick contested the legitimacy of these claims and sought international arbitration. In October 2024, Barrick paid $85 million as a "gesture of goodwill" and by February 2025, it agreed to pay an additional $438 million to resolve the dispute. However, the payment has yet to be completed, and negotiations continue, likely revolving around the tax regime that will apply to Barrick's assets. The closing of the company's office on April 15 and the government's threat of putting Barrick's Loulo-Gounkoto mine under temporary administration signal an escalation in the ongoing negotiations. Similar tax demands were made against Australian-British company Resolute Mining, which agreed to pay $160 million at the end of last year. For Mali's long-term sustainability, one-time compensation payments are not enough. The new legislation and the government's firm stance toward foreign investors must be accompanied by strengthened regulatory and fiscal frameworks, along with the development of local expertise in industrial gold mining and exploration - such as enhancing the capabilities of the state mining company. Gold can serve not only as a buffer against potential macroeconomic risks but also as a foundation for national currencies, helping prevent excessive inflation and exchange rate volatility. (
Daily Mirror
01-05-2025
- Business
- Daily Mirror
'Elon Musk or Donald Trump: who's the worst businessman of all time?'
The title of worst businessman in history definitely belongs to one of them, says Fleet Street Fox. But who has cost the most? When Mansa Musa, the richest man in history, rode into Cairo in 1324, he brought with him 80 camels carrying 12 tons of pure gold, equivalent by some estimates to about £4bn today. He handed nuggets to beggars, paid for groceries with fistfuls of dust, and built a new mosque to pray in every Friday. In spending so lavishly, the King of Timbuktu was single-handedly responsible for devaluing the price of gold in Egypt by 12% for more than a decade. But it had a purpose: in return for laying out just 1% of his total wealth, which was built on gold and salt mines in Mali, he crippled the only rival gold market in Africa. For a small hit, he made a vast profit, and was able to make his inherited wealth and power grow even further. Let us compare him then to the men who are currently the richest and most powerful in the world, Elon Musk and Donald Trump, whose combined business acumen has so far resulted in the sort of economic own-goals that would make Mansa Musa piss his pants laughing. Both men inherited fortunes, speculated with them, loaded businesses with so much debt they are technically the poorest people on the planet, yet are considered billionaires whose smallest word can send sales, stocks, or migrants flying. Last week Donald Trump announced he would invite the biggest investors in his cryptocurrency to the White House for dinner; bang goes another clause of the US Constitution, and up goes the value of his meme coins, netting him around $900,000 just for sending the email. Yet just floating the idea of trade tariffs has knocked $90billion off the US economy, according to the latest GDP figures he's tried to blame on someone else. The next quarter results will show what happened when the tariffs actually hit, the bond markets caught a cold, and 250,000 public sector workers were fired. If merely suggesting tariffs cost double what Liz Truss managed to spaff up the Bank of England's wall, a trade war becoming manifest is going to put lettuce metaphors right out of business. Both men have tried to sell hats; Trump has had more success, probably because they weren't quite as cheesy. He made at least $3m in 2023 from branded merchandise. That's equivalent to 60,000 people buying the $50 'Trump 2028' cap with which he is advertising his next insurrection. The army he is recruiting, and the profits made, more than replace the $400,000 a year salary he donated in his first term. Whether he will do so in his second is unknown, and anyway, a moot point. For every single day that the president spends in his Florida estate Mar-a-Lago, the government shells out $240,000, equivalent to 1.5 Keir Starmers. Trump bills secret service agents $546 a room, and it cost $60,000 just for four trips by White House staff. With the occasional summit thrown in, in his first term more than $16m flowed into his hotels, golf courses and restaurants, with millions more guaranteed by well-heeled visitors prepared to pay the £200,000 fees to be near to the president and wouldn't be seen dead in the gilt-ridden hellhole otherwise. Not bad, for properties that were due to be seized by a court last year to pay his court bonds. But while he makes a profit, the local sheriff's department has had to spend $5m in overtime, the secret service has had to fund $2m in security upgrades, and it costs $50,000 an hour to scramble jets to intercept anyone who accidentally breaches the no-fly zone imposed over his club. In 2017 a local skywriting business was reported as having to shut down every weekend, losing thousands. Knock that, and the tax take from it and dozens of other businesses not benefitting from the disruption, and local people are losing millions while Trump's fat ass gets an ever-larger cushion of money. You can expect the $400bn minerals deal signed with Ukraine will not profit the US as much as it does Trump's family or friends; and perhaps not even them, considering that 40% of the mineral reserves are in the land Trump is happy to hand over to Russia, Ukraine currently has zero commercially-operational rare earth mines, and bringing them online would cost hundreds of millions per deposit and take more than a decade. And to make that possible, the US taxpayer would need to pay billions in defence contracts for someone to keep an eye on it. Of course it's a brilliant deal, so long as you don't do the maths until after Trump's dead. Elon Musk, meanwhile, took the profits from his father's emerald mine and turned therm into an electric car company, a space exploration company, an artificial intelligence company, and destroying his own credibility. Once the darling of the financial world, he is now one of its biggest risks, to the extent that Wall Street banks have been unloading his unpaid debts at a loss just to be shot of him before it gets any worse. And my, it HAS been bad. He bought Twitter with $44bn, about a third of it debt. He renamed it X, sacked 80% of the staff, turned it into a Far Right troll factory and its value plummeted to $9bn. To make up for this, he arranged a stock buyout by his AI firm which meant his Twitter co-investors could share the profits of a business he hadn't tanked yet, and now the two companies are worth what Twitter was when he bought it. Then to really show his brilliance, he donated $291m helping Donald Trump to get elected, and wound up losing $156bn from his net worth as the association tanked the share price of his most successful business, Tesla. Even Trump tired of him, waving him off to "spend more time with his cars". He lost 175 times what he had invested, and if it were actual cash rather than just the imaginary sort he'd be in a concrete overcoat by now. Tesla sales are down 13% at a time when electric car sales in general are 7% higher, year on year. Drivers trying to offload a secondhand Tesla have seen prices fall 22%. There just aren't enough twats who still want to buy a twatmobile. On top of this he's fired 250,000 people, rendered it near-impossible to use government websites, and saved less than 10% of the trillion dollars he had claimed was public sector waste. Yet despite banjaxing multiple businesses, becoming a net liability and being outed as a social media incel who has to resort to DMs, NDAs and IVF to father a legion of mini-Musks for us all to contend with in the future, he's still considered the richest man on the planet. To some people, their litanies of failure prove Trump and Musk are brilliant businessmen. That they have financial skill, if only in enriching themselves at the expense of others, and it is therefore worth standing as close to them as possible in the hope that some of their golden shower rains in their direction. To that proportion of the human race which is sane, however, it doesn't add up. According to the above back-of-a-fag-packet maths, Trump has made at least $354m from the presidency so far, but he's cost America at least 3 times that at $113bn, possibly 7 times if you compare the likely costs and non-benefits of the Ukraine deal. Musk, meanwhile, has squandered $191.3bn of goodwill, stripped aid from the starving worldwide, and lives by his own admission in a one-room prefab in Texas while his customers regularly ask him when, exactly, he will be leaving for Mars. Both have moulded a world order that will continue to malfunction long after they leave orbit or get whacked by a rival. To some this proves their brilliance; to Tony Schwartz, the man who actually wrote Trump's autobiography The Art of the Deal, it's proof that unloved little boys can grow up to be proper dickheads. These men each made a massive deal with the American people, who didn't notice what they were offering was the chance to become North Korea, only more stupid because at least the North Koreans didn't VOTE for it. Trump has cost them freedom, sanity and a world order, while Musk has merely cost his investors, staff, the US taxpayer, and all the women damaged enough to think a tech bro would set them up for life. Musk has lost more money, but is still richer than Trump, who is costing us all things that money just can't buy. If Mansa Musa were here, it's likely that - once he'd wiped his eyes and pulled himself together - he'd offer to help Trump and Musk fund their jaunt to the red planet, and tell them they could return when they'd used their business nous to exploit its natural resources and form a new civilisation of stable geniuses capable of doing anything more useful than kissing their own arses. Fiver says they'll die fighting over the comb.
Russia Today
01-05-2025
- Business
- Russia Today
Westerners came for gold. Now this nation is sending them packing
Over the past two years, Mali has been steadily tightening its grip on the gold mining sector while justifiably increasing pressure on foreign investors, including the leading Canadian mining company Barrick Gold. In mid-April, the company's office in Bamako was closed due to a tax dispute. The results of this policy are already evident: in 2024, Mali received 40% more payments from gold mining companies, totaling $1.4 billion. In the long run, such policies could significantly strengthen macroeconomic stability and serve as a model for other countries in the Sahel region and across Africa. Gold is an integral part of Mali's historical and economic identity. The country is often associated with the image of Mansa Musa, the 14th-century ruler of the Mali Empire, known as one of the wealthiest individuals in history. His legendary pilgrimage to Mecca was marked by the lavish distribution of gold which, according to legend, even affected the region's economy. Estimates of how much gold Musa took on his pilgrimage vary widely, ranging from more realistic figures of around half a ton to fantastical claims of up to 20 tons. Today, gold remains crucial to Mali's economy, accounting for 7% of GDP and serving as a vital source of foreign currency and export revenues – making up three-quarters of the country's total exports by value. During the colonial era, gold mining in Mali was primarily carried out using artisanal methods. Industrial mining began to develop only after the country gained independence, as the Malian government recognized gold as a means to diversify an economy largely dependent on agriculture and cotton exports. The Soviet Union was a significant contributor to the development of Mali's gold mining sector. In 1984, the USSR helped launch the Kalana mine which produced half a ton of gold annually. Beyond technical support, the USSR helped establish a national geological school in Mali and promoted the development of the processing industry. Today, Mali's gold reserves are estimated at nearly 900 metric tons, and are primarily concentrated in the southern and western regions of the country. Alongside South Africa, Ghana, Tanzania, and Sudan, Mali stands as one of Africa's leading gold producers, with an annual output of 50-60 metric tons. Major players in the field include Barrick Gold (operating the Loulo-Gounkoto mine) and Resolute Mining (Syama mine). While most of the production is conducted through industrial methods, an artisanal gold mining sector also exists, particularly in northern and southwestern Mali. It is often linked to illegal activities – such as smuggling and financing terrorist groups – that continue to pose a threat to regional stability. Mali became a key player in the global gold market during the 1990s, as foreign investors entered the sector amid market reforms. Within a decade, these investors increased production thirty-fold, reaching 30 tons by the year 2000, and later boosted it to 50 tons. The period of increased gold production coincided with legislative reforms carried out in 1991- 1999 with the help of the World Bank. These reforms were characterized by a liberal approach, offering foreign investors tax deductions and exemptions for certain categories. For example, a law enacted in 1991 exempted investors from all taxes for the first five years of production. This led operators, driven by the quest for windfall profits, to extract as much gold as possible at the expense of Mali's ecology and long-term interests before tax obligations kicked in. The subsequent reforms were also inconsistent. As a result, Mali's government missed out on significant tax revenue due to numerous exemptions and foreign operators underreporting their production, exports, and profits. Consequently, the industry remained export-oriented and did not meaningfully contribute to Mali's socio-economic development. Like many developing nations where mining is largely 'delegated' to foreign investors, Mali's government passively collects income from the gold sector through a mix of fiscal tools: royalties (a fixed fee per tonne extracted), corporate income tax, special levies (for licensing or license renewals), dividends from state holdings in mining ventures, and export tariffs and licenses. Thus, the government's revenues heavily depend on foreign companies and, crucially, on the regulatory environment – whether regulators can compel these companies to pay what they owe and whether they have the means and will to verify the data submitted by mining operators. In Mali, as in many African countries, it's common for foreign companies to underpay taxes, leading to frequent disputes. Every five to ten years, the government conducts an 'audit' of the sector and assesses back taxes owed by foreign companies. Often, the government lacks real tools to determine how much has gone unpaid, making precise amounts subject to negotiation between regulators and investors. Typically, a company agrees to pay a certain sum in exchange for the right to continue operating in the country. This serves as an informal version of a windfall tax. For example, in the mid-2010s, ExxonMobil faced a $74 billion fine for unpaid taxes in Chad, while in 2019, Canadian firm Barrick paid $300 million to Tanzania to resolve a tax dispute. A similar situation has unfolded in Mali. Following the 2020 coup, the new authorities shifted toward gradually sovereignizing the economy and reducing reliance on external borrowing. In this context, gold presents the primary and most straightforward opportunity to boost the budget. In 2023, Mali introduced a new mining code aimed at increasing sector revenues. This legislation raised royalties from 6% to 10.5% and increased the state's and local private investors' shares in projects from 20% to 35%, along with the removal of several tax incentives. In 2022, revenues from the sector reached 763.7 billion CFA francs ($1.3 billion), but by 2023, they had fallen by 26%. Despite a 23% decline in industrial production in 2024, government revenues soared to a record $1.4 billion, according to Reuters. This increase was driven by higher taxes and payments from foreign companies. The new mining code marked a significant shift in the Malian government's approach to the sector and set the stage for a conflict with Canadian company Barrick Gold – the world's second-largest mining company and the main investor in the mining sector. Following an audit of the period from 2020 to 2022, Malian authorities accused Barrick of underpaying taxes and dividends, demanding over 300 billion CFA francs (approximately $512 million). Barrick contested the legitimacy of these claims and sought international arbitration. In October 2024, Barrick paid $85 million as a 'gesture of goodwill' and by February 2025, it agreed to pay an additional $438 million to resolve the dispute. However, the payment has yet to be completed, and negotiations continue, likely revolving around the tax regime that will apply to Barrick's assets. The closing of the company's office on April 15 and the government's threat of putting Barrick's Loulo-Gounkoto mine under temporary administration signal an escalation in the ongoing negotiations. Similar tax demands were made against Australian-British company Resolute Mining, which agreed to pay $160 million at the end of last year. For Mali's long-term sustainability, one-time compensation payments are not enough. The new legislation and the government's firm stance toward foreign investors must be accompanied by strengthened regulatory and fiscal frameworks, along with the development of local expertise in industrial gold mining and exploration – such as enhancing the capabilities of the state mining company. Gold can serve not only as a buffer against potential macroeconomic risks but also as a foundation for national currencies, helping prevent excessive inflation and exchange rate volatility.
