The seemingly increasing trend towards nationalist thinking, combined with and likely driven by growing economic inequality, has resulted in several changes in mining and tax legislation in sub-Saharan Africa countries.
Herbert Smith Freehills Africa Group co-chair and partner Peter Leon says the recent and significant changes to mining regulations in various African States have caused concern that a “regional trend of resource nationalism may be emerging”.
White & Case partner Rebecca Campbell notes that her firm’s yearly mining survey of 2018 found that about 45.1% of respondents believe that the heightened risk of resource nationalism across Africa makes it difficult to justify investment.
However, with about 42% saying that the risk was manageable and about 13% believing the potential returns outweighed the risks, investor sentiment towards African mining jurisdictions has not completely soured.
Despite the apparent appetite for investment, about 64.5% of survey respondents believe that political risk or “the possibility of government interference” is the chief obstacle. This assertion implies a growing sense of caution around trends in African mining legislation, though it has yet to devolve into outright pessimism.
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