Africa’s rising risks jeopardizing recent mining growth: report
Exposure to external cross-border shocks, such as conflict, climate change, pandemics, and lack of food, water and energy, are some of the increasing risks in Sub-Saharan Africa, reveals the report published Thursday by analysis firm Maplecroft.
According to the UK-based risk company a deteriorating operating environment for investors in Sub-Saharan Africa is unfolding, which will require steps from governments to build resilience to rising cross-border “global risks.”
In its 6th annual Global Risks and Resilience Atlas (GRRA), which features 36 threat indices used to identify emerging global risks related dangers to business in 179 countries, Maplecroft experts say 30% of the African economies more at risk this year than in 2012 and last year.
Fifteen nations of Sub-Saharan Africa, a term that refers to all the continent with the exception of the northern countries – Egypt, Libya, Tunisia, Algeria, Morocco and Western Sahara, show a significant increase in their risks levels over the last three years.
The analysts signalled out Mali, Guinea, Eritrea, Madagascar, Mozambique, Senegal and Tanzania among the countries that have become more risky for investors, , particularly those in the extractive sector lured by the region’s abundance of natural resources.
West Africa’s biggest economy, Nigeria, is also cited as uncertain market, as the nation climbed from the 22nd place to the 14th (being 1 the riskiest category).
The report resonates with Randgold Resources (LON:RRS) chief executive Mark Bristow’s Tuesday comments.
Speaking at the annual Mining Indaba, Bristow said that growing uncertainty about the regulatory environments and tax regimes in Africa’s mining jurisdictions is discouraging international investment in these countries.
For Africa’s abundant mineral wealth to be brought to account, he added, mineral-rich countries, investors and assets developers should recognise that their interests are closely aligned and work together. “In other words, what Africa needs are partnerships for prosperity,” he concluded.
Image by US Army Africa, via Flickr.