After its second Validation, Afghanistan has made meaningful progress in implementing the EITI Standards.
Afghanistan has improved its transparency of licenses and contracts, state-owned enterprises, and quasi-fiscal expenditures, and the country’s temporary suspension was lifted.
EITI Congratulated Afghanistan in a released statement on Thursday for addressing shortcomings identified in its first validation through systematic data divulgence delivered by concrete reforms in governmental systems.
President Ashraf Ghani noted EITI’s action importance in the country, “Every citizen has the right to know who is developing the country’s natural resources and how the government is managing the revenues from these industries on their behalf,” he said. “EITI is one of the tools that is helping us achieve this policy objective. It has been instrumental in supporting our institution-building efforts in a sector critical to the economic future of Afghanistan.”
Reports indicate, Afghanistan’s Ministry of Mines and Petroleum announced Afghanistan’s reintegration with the Extractive Industries Transparency Initiative (EITI), the ministry is reportedly renewing its commitment to implement the corrective actions of the EITI.
The Afghan government Embraceddata platforms, establishing online reporting systems to enhance the transparency of extractive sector management and to address shortcomings identified in its first Validation, that has been achieved in an evolving political environment marked by presidential elections in 2019 and Intra-Afghan peace negotiations in 2020.
In 2018, MOMP launched a new Transparency Portal, providing information on licenses, fiscal terms, legal and beneficial ownership information, production data, and non-tax company payments to the government, this made the portal to become more comprehensive.
The World Bank also stressed EITI’s value in driving public finance management reforms in the context of fragility and violence.
Afghanistan undertook the landmark achievement of auditing the two SOEs for the first time in 2019. This exercise highlighted gaps in the SOEs’ record-keeping and financial management, deemed as a necessary step in the government plans to corporatize the enterprises.
But the government will need to ensure regular auditing practices and Utilize EITI support to track findings.
According to EITI “Afghan Gas Enterprise and North Coal Enterprise – are strategic for the government’s plans to improve revenue generation from the sector”.
Afghanistan’s government has legislated for beneficial ownership information to be made public for mining, oil, and gas licenses. The country began publishing ownership data on its Transparency Portal earlier this year. Yet more work needs to be done to ensure that all beneficial owners are publicly disclosed, including politically-exposed persons and owners who control companies through non-equity means.
Stronger engagement in EITI implementation by government, industry, and civil society could reportedly lead to more such innovations, as Integrity watch in Afghanistan is planning to expand its community-based monitoring program by including extractive projects in their area and track its impacts.
Informal mining sectors in Afghanistan is one area that requires EITI’s reporting to shed more light on unrecorded mining in the country.
While the government collects $45 million dollars annually but the more than six times of this amount is estimated to have been lost through small-scale and unmonitored mining activities.
Afghanistan is a member of the EITI since 2010, the country lost its membership due to inadequate implementations in 2014 and 2017.
The Extractive Industries Transparency Initiative is a global standard for the good governance of oil, gas, and mineral resources.