By Matthew Dlamini
NAMABIA has been ranked the second-most favourable jurisdiction on the Policy Perception Index (PPI) in Africa.
The recently released 2021 Fraser Institute Survey of Mining Companies report says Namibia made a significant improvement from fifth position in the 2020 survey.
Morocco had the highest PPI score and was the top-ranked country in Africa. The Republic of Ireland tops the world rankings.
According to a statement issued by Chamber of Mines of Namibia (CMN) chief executive officer Venson Malango on 14 April, Namibia improved on the global PPI ranking, gaining 18 places from 47th position in 2020 to 29th in 2021.
“It must be highlighted and cautioned that the absolute improvement of Namibia’s score from 74,30 points in 2020 to 75,20 in 2021 is marginal and still much lower than the outstanding scores of 80,70 and 82,22 points achieved in 2018 and 2019, respectively,” Malango said.
“This indicates there is still much to be done to improve Namibia’s policy landscape,” he said.
Despite Namibia’s improvement on the overall PPI index, individual responses on Namibia’s policy environment were negative.
They highlighted the lengthy process for getting permits as a hindrance for project development, and expressed concerns around the non-deductibility of royalties, although this was resolved in 2020.
The concern was that “non-deductibility of royalty payments prevents the sector from minimising costs and this hurts the industry’s competitiveness”.
The CMN believes this statement has negatively affected Namibia’s performance.
Namibia’s PPI score and ranking globally and in Africa could have been higher without this concern as the risk has not been applicable in the last two years, the chamber said.
The CMN, however, believes this report accurately reflects the overall current investment landscape, one which appears to be in limbo rather than improving dramatically.
“It remains increasingly worrisome that while pronouncements by the government favour a conducive investment environment, there is no visible corresponding actions to demonstrate the finalisation of outstanding policy matters that continue to perpetuate investor uncertainty,” Malango said.
He said the chamber remains committed to working with the government to overcome these hurdles, and to ensure the most favourable policy outcomes are reached to benefit mining in Namibia, and to make Namibia the most attractive jurisdiction for investment into exploration and mining in Africa.
The Investment Attractiveness Index combines the Policy Perception Index and the Best Practices Mineral Potential Index and is an overall measure of a country’s competitiveness.
“Although the mineral potential index carries more weight, investors are sensitive to policy uncertainty and will prefer jurisdictions that have a stable policy environment and are conducive for mining,” said the chamber.