Creating Incentives To Increase Economic Links

At a Glance

• To mediate the risks faced by first-mover companies, governments can offer them incentives to expand into new markets and innovate products.

• Incentives might include tax credits, and grants supporting research and development (financed through extractive industry taxation).

• The development of national support systems for innovation is key to creating economic links between the extractive sector and other sectors that use the same capabilities.

Case Studies

• Getting More out of the Oil and Gas Sector: Lessons from Angola and Chad (Advocates Coalition for Development and Environment)
• South African Mining Equipment and Related Services: Growth Constraints and Policy (David Kaplan)

Key Resources

• From Africa to Country Mining Visions (Isabelle Ramdoo)
• A Country Mining Vision Guidebook: Domesticating the Africa Mining Vision (Africa Minerals Development Centre)
• Resource-based Industrialisation in Africa: Optimising Linkages and Value Chains in the Extractive Sector (Isabelle Ramdoo)

Topic Briefing

The core challenge in forming horizontal linkages is that first-mover companies need to take risks to expand into new markets. To mediate these risks, governments can provide incentives to help suppliers of the extractive sector expand into new markets and products—or to help suppliers of other sectors obtain capabilities from extractive activity that will foster the development of new products.