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African Nations Struggle in Global Mining Investment Rankings

Fraser Institute Survey Reveals Significant Declines in Investment Attractiveness Across African Countries

by Adenike Adeodun

The Fraser Institute’s latest Survey of Mining Companies has highlighted a worrying trend for several African nations, with countries like Niger, Mozambique, Zimbabwe, and Senegal ranking low in terms of investment attractiveness for mining exploration. This detailed analysis draws on responses from 293 participants globally, emphasizing the impact of both geological potential and government policies on investment decisions.

The survey reveals a significant decline in the attractiveness of African jurisdictions for mining investments, with the continent hosting many of the least favorable regions in the global Investment Attractiveness Index. This index combines the Best Practices Mineral Potential Index, which assesses geological attractiveness, and the Policy Perception Index, which evaluates the impact of government policy and regulatory environment on investment.

Botswana, once a top contender in the index, has seen a noticeable drop in its score from 82.75 to 76.87, sliding from tenth to fifteenth place out of 86 jurisdictions. Other countries like Morocco and Zambia have also experienced declines, although Zambia’s score showed some improvement. Conversely, nations like Mozambique, Zimbabwe, and the Democratic Republic of Congo (DRC) have continued to perform poorly, with Mozambique ranking as low as eighty-second.

The deterioration in scores can be attributed to various factors, including increased uncertainty regarding environmental regulations, protected areas, and labor laws, which have become significant concerns for investors. Such regulatory uncertainties are particularly pronounced in countries like South Africa, where investment attractiveness scores have continued to fall, reflecting broader concerns about the country’s mining policy environment.

Despite these challenges, some countries have shown improvements in certain aspects. Angola, for instance, has seen a notable increase in its score, reflecting perhaps a more favorable policy environment or improved perceptions of its mineral potential. Similarly, Botswana remains relatively well-regarded in terms of policy perception, even though its overall attractiveness has diminished.

Globally, the survey positions the United States, Australia, and Canada as the top regions for exploration investment, highlighting a stark contrast with the African context, where policy unpredictability and regulatory challenges deter similar levels of confidence.

The implications of these findings are significant for the African mining sector. The evident decline in investment attractiveness not only impacts the potential for economic growth and development in these regions but also signals the need for urgent reforms in policy and regulatory frameworks. African nations must address these issues to harness their full mineral potential and attract much-needed foreign investment.

To reverse these trends, African countries need to focus on creating more stable and transparent regulatory environments that can instill confidence among potential investors. This involves clear, consistent policies on environmental protection, labor rights, and mineral exploration and extraction. Moreover, enhancing the geological database to better showcase the mineral potential could also help in improving the perceptions of these countries’ mining sectors.

Looking forward, African nations must take these findings seriously and enact reforms that will make their mining sectors more competitive on a global scale. This will not only improve their standings in future editions of the Fraser Institute’s survey but will also contribute to sustainable economic development driven by a robust mining industry.

In conclusion, while the Fraser Institute’s survey paints a challenging picture for the future of mining investment in Africa, it also offers a roadmap for how countries can improve their standings. By addressing policy uncertainties and improving regulatory frameworks, African nations can enhance their attractiveness as destinations for mining investment, unlocking potential benefits for their economies and citizens.


Source: Mining Weekly

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