Senegal: Gold Mining Brings Social Change

Mali is Africa’s third-largest gold producer, and neighboring Senegal now appears set for a gold mining boom. The BBC released a photo essay this week, “Senegal’s Gold Rush,” that is well worth a look.

Gold mining could certainly boost Senegal’s economy – in Mali, gold mining produced record-high budgetary revenues in 2010. Yet mining booms can also cause discontent among local populations. Oxfam wrote in 2007 that in Mali, “citizens have so far seen little benefit from mining revenues.” Riots have occurred in Malian mining areas.

Moreover, mining brings social change. In the mining areas of Senegal, the BBC reports, “One of the places more radically affected has been Diabougou which until recently was a tiny village and now is home to thousands of informal miners. But along with wealth, gold has brought prostitution to the very traditional and remote area.” A dramatic influx of unmarried men and foreign prostitutes could easily trigger substantial anger toward the government and the mining companies. Senegal’s “gold rush” may be a boon for the country, but the trend will bring problems as well.

5 thoughts on “Senegal: Gold Mining Brings Social Change

  1. I don’t understand what’s so mysterious about the impact of resources. We have decades of experience on it. Is it really that hard to plan for this?

  2. Countries around West Africa vary widely in their tax regimes for mining, with Mali being one of the higher tax regimes in the region, collecting about 20% of revenue… some of the other countries (Burkina, Ghana, possibly Senegal) see very little of the revenue- sometimes less than 10%, since they tax mining so lightly. Most countries had few provisions for upside sharing as gold prices rose from $500 to $1900/oz. over the last four years. So the mining companies reaped most of the windfall, which should have accrued to the countries. When you ask people involved (officials, company people, experts) why obvious contract modifications were not made (like increased share of revenues as prices rise) they give you blank stares.

    Of course, as Gyre suggested, many countries end up worse off from resource rents, anyway…. Same has been true of petroleum. Look at Equatorial Guinea!

    There are movements to reform like EITI and Natural Resource Charter, but not nearly enough knowledge transparency, and the whole “mines lead to prostitution” canard that journalists love (sorry Alex) because it makes a great human interest story (Wild West, heart of gold), is a powerful distraction from “Why did they make $7m from the mine and we only made $700,000?!?”

    • Michael, great points. I definitely don’t want to overdo the “human interest” angle – I just thought it was worth talking about cultural change alongside the very important questions you raise about how wealth is (or is not) shared with communities.

      • In this case prostitution* is also worth mention. One of many pieces for understanding how sudden resources can create social tensions and sometimes violence.

        *Or at least the influx of workers who attract the presence of women, which can lead to more issues.

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