Political and legislative landscape unappealing
Despite the much needed Foreign Direct Investment (FDI) into Africa, investors are still wary of doing business on the continent due to the seemingly volatile political and legislative landscape.
This was said by the Botswana Geoscience Institute Director Science Delivery, Puso Akanyang during his presentation on ‘Practical lessons that Botswana can draw from its counterparts- to be positioned as a mining centre of excellence’ at the recent Mining Investment Botswana Conference 2018.
Coupled with the political and legislative landscape, Akanyang also said corruption, unilateral cancellation of licenses, nationalization of assets as well as poor access to old exploration data, which inevitably leads to duplication of efforts are but just some of the impediments to attracting FDI into Africa.
“Botswana has not been spared the discredit as it has in the past realized a decline in FDI,” he said.
The BGI Director Science Delivery also outlined some of the practical approaches to the issue as encouraging citizen participation in mining and exploration as well as facilitating infrastructures such as roads, rail, and power to attract investors.
Some of the approaches he outlined were to diversify Botswana’s mineral sector from just diamonds, which are the most extensively mined mineral in Botswana, to create stable and universal revenues and rents.
He continued that, the government should also encourage small-scale and artisanal mining.
Speaking to his institute’s mandate, Akanyang said there should also be a comprehensive geological database that is of good quality and easily accessible by potential investors.
“We are currently working on a modern platform for geo-scientific data discoveries and improved geo-science data banks. The data will be stored at the National Geoscience Institute Research Centre (NGIRC).”
Giving his insight on the topic ‘2018 commodities outlook for Botswana’, which explored if there was a cause for investors to be wary about the volatility of the commodity prices, First National Bank of Botswana Market Strategist, Moatlhodi Sebabole said the direction of commodities was looking up with a more positive outlook from 2016 and beyond.
He, however, warned that a commodity-led economy, such as Botswana’s, is vulnerable to fluctuating commodity prices since the country is reliant on diamond mining by upwards of 80 percent.
“Manganese production in Botswana, as an example, is a great opportunity for diversifying the mining sector,” said Sebabole before adding that the mineral is in high demand as its potential to store power is highly indispensable in the booming electric car manufacturing sector in China.
He also said in future, the demand for power will increase especially in mining and therefore power banks such as batteries -made from manganese- will more than double in demand.