Resource nationalism risk to investment on the rise, led by Africa: study – by Robert Perkins and Diana Kinch (S&P Global Platts – March 21, 2019)

London — Indirect forms of resource nationalism, particularly in Africa, are on the rise, threatening the investment climate in some of the world’s biggest oil and mineral producing nations, according to global risk consultancy Verisk Maplecroft.

A total of 30 countries have witnessed a significant increase in resource nationalism risks over the last year, including 21 major producers of oil, gas and minerals, Verisk Maplecroft’s latest Resource Nationalism Index shows. The country now most at risk is the Democratic Republic of Congo, which has been downgraded by five places in the rankings from a year ago to the highest globally alongside Venezuela.

Regionally, Africa is also home to 10 countries experiencing a growth in resource risks, including Tanzania (third highest risk), Zambia (17th) Gabon (23rd) and Equatorial Guinea (40th), according to the study.

The most common issues increasing risk in countries include rising tax pressures, changing contractual terms and tougher local content requirements, the consultancy believes.

“The index shows host governments are using such measures to wrestle revenues away from oil, gas and mining operators across the continents,” the study concludes. Countries now rated “extreme risk” by the study include: Venezuela and the DRC (joint highest risk globally), Tanzania in third, Russia fourth, and North Korea and Zimbabwe joint fifth, followed by Swaziland and Papua New Guinea.

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