The Auditor General is finalising an audit into the efficiency of minerals revenue collection, noting that a risk assessment had revealed potential areas of concern in the key economic activity.
In her latest report on government finances, Pulane Letebele noted that potential risks had been identified and prioritised and the audit into revenue collection was already at reporting stage. “The objective of the audit is to assess the efficiency and effectiveness with which the Department of Mines is collecting these revenues from mining companies,” she said.
Mineral revenue collection is particularly important for government this year, as fiscal authorities scramble to cover a P13.6 billion deficit in the current financial year. Mineral revenues, which include taxes, royalties and dividends, were originally forecast to reach P20 billion at the time of the budget in February.
The figure has since been revised to P10.5 billion as a result of the coronavirus (COVID-19) outbreak, which forced the closure of borders, suspended production and depressed demand for the country’s main mineral commodities. Letebele said Batswana are still asking questions around the mineral revenues government receives annually from mining companies.“These questions include, whether government receives all the revenue that it should from natural resources, whether there is reliable information
These questions needed to be answered through audits of the extractive industries, from which government sources most of the revenues to support the national budget and development programmes.
A public finance expert told BusinessWeek the audit into minerals revenue collection was timely to close any loopholes in the existing supervisory structures.
“The current structures involve the Accountant General and the Public Accounts Committee at Parliament, which can dig deeper into contracts, the arrangements with companies and other details.
“However, a specific audit looking at the efficiency of revenue collection within the Department of Mines could plug any leaks, without waiting for these to be picked by supervisory bodies,” the expert said, requesting anonymity for professional reasons.
Letebele said an audit of extractive industries was also important in enhancing citizen beneficiation, as the “negligence of such an important sector can have undesirable impact on its contribution to the country’s economy”.