Africa – The median score for Africa on mining policy factors increased noticeably in 2014, and remains relatively steady when considering the overall investment attractiveness of the region, according to non-partisan Canadian public policy think-tank the Fraser Institute’s annual survey of mining companies for 2014.

This is despite the addition of eight new African jurisdictions, which were added to the 2014 survey for the first time, namely the Central African Republic (109th out of 122), Egypt (117th), Lesotho (107th), Mauritania (87th), Morocco (40th), South Sudan (110th), Sudan (113th), and Uganda (92nd).

Most attractive in Africa

Botswana is again the highest ranked jurisdiction in Africa on policy factors, ranking 13th out of 122 jurisdiction surveyed in 2014 and up from 25th of 112 in 2013.

Botswana’s higher score on the policy perception index (PPI) reflects an improvement on the ratings for nearly all policy factors, most notably for the availability of labour and skills (up 15 points), with less uncertainty concerning the administration, interpretation, or enforcement of existing regulations ( up 14 points), and security (up 11 points).

Namibia also showed improvement on its policy factors, moving up to a ranking of 20th in 2014 from 34th in 2013.

In a consideration of pure mineral potential on the investment attractiveness index, Namibia becomes Africa’s most attractive mining jurisdiction, ranking as the 25th most attractive jurisdiction in the survey.

Meanwhile, three African jurisdictions – Angola, Ivory Coast, and Sierra Leone – each saw their PPI scores improve by more than 20 points.

This enabled Angola and the Ivory Coast to move out of the bottom 10 this year.

Ivory Coast saw the largest improvement in Africa in both its PPI score and rankings; it moved up to 61st in 2014 from 105th in 2013, in part due to improvements in ratings for labour regulations and labour militancy, socioeconomic agreements/community development conditions, and trade barriers and infrastructure.

Also enjoying an improved ranking is Angola, which moved from 108th in 2013 to 78th in 2014, reflecting better ratings for trade barriers and the availability of labour and skills.

Sierra Leone’s PPI score and ranking also improved in 2014 to 80th out of 122, after ranking 96th out of 112 in 2013, the jurisdiction’s first year in the survey.

Sierra Leone’s better ranking reflects improved perceptions of its taxation regime and labour regulations and the availability of labour and skills.

Worst performers

Despite Africa’s attractiveness as a mining and investment destination, some countries have found themselves at the bottom of the worldwide survey rankings in 2014.

While Zimbabwe was amongst the bottom 10 in 2012/2013 and 2014, owing to its mineral rights ownership uncertainty and skewed licencing, the greatest deterioration came from Nigeria, which dropped from 75th out of 112 in 2013 to 116th out of 122 this year.

Contributing to its decline was increased uncertainty concerning environmental regulations (down 25 points), trade barriers (down 9 points), and regulatory duplication and the legal system (each down by 8 points).

Ethiopia also experienced a similar decline to Nigeria in its ranking, mainly owing to inconsistencies between mining law and mining regulations and the introduction of very high royalty rates.

Six African countries – South Sudan (119th), Zimbabwe (118th), Nigeria (117th), Sudan (116th), Central African Republic (115th), and Ethiopia (114th) – ranked in the bottom 10 of the worldwide survey rankings this year.  As noted, South Sudan, Sudan, and Central African Republic were new additions to this year’s survey.

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