Thursday, February 29, 2024

Botswana loses its spark in the eyes of Mining investors

Botswana’s investment attractiveness in the mining sector has been weighed down by concern over uncertainty   concerning protected areas, political stability, and infrastructure.

Canada’s Fraser Institute which carries the annual “Survey of Mining Companies” said Thursday that Botswana has recorded a decline in its 2017 survey.

The survey was sent to approximately 2,700 explorations, development, and other mining-related companies around the world. The survey was conducted from August 22nd to November 10th, 2017.

Fraser Institute survey shows that the top jurisdiction in the world for investment based on the Investment Attractiveness Index is Finland, which moved up from 5th place in 2016.

In Africa, Botswana is again the highest ranked jurisdiction in Africa on policy factors, ranking 21st (of 91) in 2017, after ranking 12th (of 104) in 2016.

Fraser Institute says neighbouring Namibia is the second most attractive jurisdiction when only policies are considered, ranking 39th (of 91) this year.

Four African countries this yearÔÇöDemocratic Republic of Congo (DRC), Ivory Coast, Tanzania, and ZambiaÔÇöexperienced declines in their PPI scores of over 20 points.

The DRC experienced the largest decline in Africa based on the perceptions miners have of policy. The DRC’s decrease of over 25 points resulted in this country dropping from 70th (of 104) last year to 87th (of 91) this year.

Investors displayed increased concern this year over trade barriers (+38 points), uncertainty concerning disputed land claims (+37 points), and socioeconomic agreements/community development conditions (+37 points).

The Ivory Coast also experienced a large decline of nearly 22 points in its PPI score, resulting in it dropping in the global rankings from 40th (of 104) in 2016 to 67th (of 91) this year. Investors indicated that trade barriers (+70 points), uncertainty regarding the administration, interpretation, or enforcement of existing regulations (+56 points), political instability, and labour regulations and employment agreements (both +40 points) were acting as deterrents to investment this year. Tanzania’s score and rank also deteriorated this year, dropping from 59th (of 104) last year to 78th (of 91) this year.

Zambia (ranked 71st) saw its PPI score decline this year as well, removing this African country from the top 50 countries after ranking 43rd (of 104) last year. Zambia experienced increased concern over the taxation regime (+32 points), geological database (+30 points), and political instability (+30 points).

The median score for Africa on policy factors (PPI) showed a decline this year. This was also the case for the region’s median investment attractiveness score.

In terms of overall investment attractiveness, as a region, Africa ranks as the second least attractive jurisdiction for investment. Two African countriesÔÇöZimbabwe (89th) and the Democratic Republic of Congo (87th)ÔÇöranked in the bottom 10 of the survey rankings this year based on policy.

Zimbabwe was also amongst the bottom 10 in the previous five years. Kenya and Mozambique were the only two African jurisdictions in the global bottom 10 based on their overall investment attractiveness.

The survey was based on the feedback from 360 respondents out of the 2,700 the survey was sent to during August and November 2017.

An overall Investment Attractiveness Index is constructed by combining the Best Practices Mineral Potential index, which rates regions based on their geologic attractiveness, and the Policy Perception Index, a composite index that measures the effects of government policy on attitudes toward exploration investment.


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