Poor governance compromise mining investments

The International Council on Mining and Metals (ICMM) says Zambia’s scores low on governance which negatively affects the country’s mining.

The Council’s 2016 report on ‘The Role of Mining in National Economies’ released recently said poor governance compromises new mining investments, hampers efficient collection of taxes and reduces the overall contribution of mining to the economy.

The report ranks the quality of governance of the top 50 Mining Contribution Index (MCI) countries which Zambia is part of.

The two key factors measured in the rankings are government effectiveness and regulatory quality, as defined in the Worldwide Governance Indicators (WGI).

Zambia is lowly ranked scoring 36 out of 100 in government effectiveness, 32 in regulatory quality.

Chile, the world’s largest copper producer is at the top of the rankings scoring 84 on government effectiveness and 92 on regulatory quality.

Botswana stands out as the highest-ranked African country, scoring 65 in government effectiveness and 72 in regulatory quality.

“Governance matters not just for current investments, but also for future potential investments. Poor governance is therefore likely to constrain the amount of investment that a country receives,” reads part of the report.

The ICMM report says good governance is a two-way street, where investors trust governments to be efficient and fair and governments trust investors to contribute to national development.

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