Auditing the Auditor: Examining the role of Supreme Audit Institutions in Auditing the Extractive Industry in Africa

Studies have established that the extractive industries (EI) have the potential to significantly contribute to a country’s socio-economic development if harnessed well. A good number of countries in Africa have an active and well-established extractive sector, while others are nascent but growing steadily.

Unfortunately, in Africa, the paradox of poverty amidst plenty prevails. This is linked to poor governance of the sector, misappropriation of accrued revenues and complex tax minimization strategies often used by multi-national corporations which deny resource-rich countries a fair share of revenues that would be invested in providing social services like health and education. Performance of comprehensive audits and effective utilization of findings would significantly remedy this situation. These audits are carried out by Supreme Audit Institutions (SAIs).

Supreme Audit Institutions (SAIs) are the lead public sector audit organisation or national agencies responsible or auditing government revenue and expenditure in a country. Their main purpose is to oversee the management of public funds and the quality and credibility of governments’ reported audits and their compliance with existing Laws and Regulations.

SAIs are in a constitutionally empowered position to play a critical role in the improvement of transparency and accountability in the extractive industry sector through the timely performance and publication of relevant audits.

This report uses a combination of research strategies to perform a qualitative and quantitative analysis to obtain an understanding of SAI practices in auditing the extractive industries. The study explores potential mitigating factors that are negatively impacting on the efficiency and effectiveness of SAI EI audits across various African countries.

Research findings

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