Namibia’s mining sector low on global investment rankings

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Desie Heita

Windhoek-Namibia did not have the most attractive investment sector for investors in 2016, with investors ranking it at 53rd position on the Investment Attractiveness Index for 2016.

The index covers 104 countries and jurisdictions where mining activities took place that year.

The previous year, 2015, Namibia ranked more favourably in 33rd position, according to the newly released results from a survey of the global mining sector by the Canadian think tank the Fraser Institute.

The main jurisdictions are the provinces within countries such as Canada, USA and Australia.

When compared to investment attractiveness in mining activities in those provinces, investors still preferred to pump their money into those jurisdictions rather than investing in the Namibian mining sector.

The survey is an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment.

The survey revealed that Namibian mining executives rated Namibia lower than what they did in 2015 and 2013, because of what they viewed as an unfavourable policy climate in the country.

Namibia’ rank on the Policy Perception Index is at 38, falling from the 29th position it occupied in the previous year. The actual score on the policy perception is 77 – the lowest score for the country in the last three years.

The report notes that the rankings of investment attractiveness and policy perception within countries and jurisdiction should serve “as a report card to governments on how attractive their policies are from the point of view of an exploration manager”.

Botswana did well on the Policy Perception Index where she ranked at 12 while Ghana ranked at 31. Both countries improved from their positions last year, where Botswana ranked at 14 and Ghana in 52nd position.

Botswana also ranked well on the Investment Attractiveness Index at 19th position.
Other African countries the survey ranked ahead of Namibia on the Investment Attractiveness Index included Ghana, Democratic Republic of Congo, Zambia and Mali.

“While geologic and economic evaluations are always requirements for exploration, in today’s globally competitive economy where mining companies may be examining properties located on different continents, a region’s policy climate has taken on increased importance in attracting and winning investment,” the Fraser Institute’s Annual Survey of Mining Companies 2016 report noted.

Granted, the report’s findings are subjective as they are based on responses gathered from 2,700 individuals in the countries where mining activities take place. The report also noted that the policy perception index is a composite index that captures the opinions of managers and executives on the effects of policies in jurisdictions with which they are familiar.

Questions on policy perception included uncertainty concerning the administration, interpretation and enforcement of existing regulations and environmental regulations.
Other policy perception questions covered by the survey include regulatory duplication and inconsistencies, taxation, uncertainty concerning disputed land claims and protected areas, infrastructure, socio-economic agreements, political stability and labour issues.

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