In the Fraser Institute’s 2018 annual survey of mining companies (the survey) for 2018, 7 African countries have stepped up in their mining rankings. Only 10 African countries were studied. Generally there was an improvement in the median policy perception and investment attractiveness of the African jurisdictions studied.
The survey looks at the investment attractiveness and policy perception of a country or jurisdiction. The more positive view players in the sector have about a country, the higher the ranking for that country. The investment attractiveness of a country is weighed by policy factors such as regulations, taxation, and quality of infrastructure amongst others. The policy perception looks into uncertainty in the administration of extant regulations, environmental regulations, duplication of regulations, trade barriers, political stability, labor regulations, amongst others.
Botswana, which ranked 21st in 2017 moved up to 12th position in 2018 due to its improvement in policy. Namibia also moved up to 36th position from 39th in policy perception. Other African countries with increased policy perception rankings in 2018 include South Africa, Tanzania, Zambia, and Zimbabwe. In investment attractiveness, Botswana came out 32nd out of 83 jurisdictions followed by South Africa which ranked 43rd. The table below shows the current rankings of 10 African countries in 2018 compared to 2017.
Source: Fraser Institute
The survey covered 83 jurisdictions in 2018 compared to 91 in 2018. Although Zimbabwe improved its policy perception index in 2018, it still remains Africa’s second least attractive jurisdiction followed by the Democratic Republic of Congo. Ghana and Mali both declined in investment attractiveness and policy perception indexes.
These rankings are important because it helps governments determine the attractiveness of their mining policies which can influence policy reform. For countries which marked a decline in ranking, factors such as labor regulations, employment agreements, the legal system and availability of labor and skills played a huge factor. These factors will have to improve for a better ranking in 2019.