Extractive sector specialists debated yesterday, Tuesday December 17, 2024, in Dakar, the issues related to the governance of the Senegalese extractive model. The objective was to take up the initiative to renegotiate all oil-gas and mining contracts and to propose inclusive and constructive participation in order to ensure better attractiveness and stability of the country.
The new political authorities of Senegal wish to carefully examine the production sharing contracts concluded between the State and the companies, sparking an intense debate which was the subject of a panel around the theme: “Crossed perspectives on the fundamentals and governance of the Senegalese extractive model”.
The tax expert El Hadji Sidy Diop, registered with the Order of Experts of Senegal (ONES) and the Union of West African Tax Orders (UDDFAO-WAUTI), also president and CEO of Face Africa firm, considers that the renegotiation of contracts is a legitimate right. He asks: “Why should all contracts be unbalanced? » As a tax expert, he highlights the principle of maximizing state revenue. He thus maintains that the State must “maximize its revenues from oil and gas through taxation, in particular thanks to the principle of tax progressivity”. According to him, “the State must capture as much as possible the available oil and gas revenues”, and adapt its taxation according to the possibilities of revenue recovery.
The economist and tax expert El Hadji Amath Diallo, former representative of the hydrocarbon sector on the National Committee of the Initiative for Transparency in Extractive Industries (ITIE), believes that the simple fact of addressing the question of renegotiation of contracts generates uncertainty. Although there are possibilities of renegotiation, he questions the time necessary to carry out such an undertaking: “It will first be necessary to study these contracts on a case-by-case basis in order to identify their limits before undertaking anything be it.” Meanwhile, economic constraints and national stability issues remain pressing.
He recalls that oil, gas and mining contracts are the result of arduous negotiations between the State and the companies, which have “internationally recognized expertise firms in all areas of the sector”. Renegotiating these contracts is therefore not an easy task and could lead to “high costs as well as disruptions in Senegalese oil companies”. He also warns that this could discourage foreign investors, although he acknowledges that some cases warrant renegotiation.
However, he asks the crucial question: “Is Senegal in this scenario? » According to him, this promise of renegotiation, although legitimate for some and beneficial for others, should not “overshadow the signed stability clauses nor the international commitments relating to the conventions and treaties in force”
The former deputy national coordinator of the Civil Forum and former member of the executive board of the Publish What You Pay coalition, Abdoul Aziz Diop, expressed the hope that those who participated in the previous negotiations, notably Mamadou Faye, former general director of Petrosen , and Sérigne Mboup, former general director of the Société Africaine de Raffinage (SAR), be included in the contract renegotiation commission set up by the new authorities. The objective would be to capitalize on what has been learned and to have in-depth knowledge of the files in order to make informed decisions.
For him, “calling on the expertise of elders would only be beneficial for Senegal”.
