Mapping informal and financial flows in the artisanal mining sector: The cases of Sierra Leone and Liberia

Policy brief State

  • Despite being associated with a host of environmental, health and safety and social concerns, the artisanal gold mining sectors in Sierra Leone and Liberia provide essential livelihood support for poor people by supplying valuable start-up capital for other economic activities.
  • This research informs evolving efforts to formalise artisanal gold mining in the Mano River Region by mapping informal financial flows in six communities where production is taking place.
  • The study monitored 73 miners and supporters who live and work in close proximity to border regions over an 11 month period, employing an innovative methodology involving the compilation of ‘financial diaries’ of those engaged in the sector, as well as others who depend on it.
  • The findings reveal that gold is an important mechanism of trans-border exchange, particularly across the Sierra Leone-Guinea border; in both Sierra Leone and Liberia, finance and lending systems remain informal and unregulated, leaving poor people susceptible to exploitation; and market mechanisms for buying gold remain poorly developed and are dominated by informal buyers who operate outside the legal domain.
  • This project contributes to an important policy gap, by generating new knowledge about the loss of income in the economy that is channelled into informal flows and the loss of potential government revenue in taxes, both of which are important drivers of economic growth.