Africa more stable as resources boom takes hold

Greater stability across Africa is contributing to that continent’s resources boom....

  Greater stability across Africa is contributing to that continent’s resources boom, according to the Australian Government’s Export Finance and Insurance Corporation. Addressing the second day in Perth of the 2007 Paydirt Africa DownUnder Conference, the Corporation’s Chief Economist, Roger Donnelly, said a World Bank ranking noted that at least 13 countries had significantly improved their stability ratings by last year compared to their standing in 1996.“As well as conflict resolution and better economic performance, debt relief has been a contributing factor to Africa’s greater stability.” As for the effects of the recent increase in risk aversion in international capital markets triggered by the US subprime mortgage crisis, the repricing of emerging market risk has been moderate to date.“Foreign Direct Investment (FDI) inflows into Africa are booming, if from a low base, and had nearly tripled by late last year,” Mr Donnelly said.“Africa’s top ten FDI recipients now account for US$30.6 billion in FDI receipts, or three percent of global FDI. South Africa and Egypt are by far the greatest beneficiaries.“Exploration spending is on the rise and Australian-based companies were the third largest African exploration spenders – at US$160 million - in 2006.“In short, Africa now measures up okay internationally and its World Bank ratings performance is no worse than some of its competitors outside Africa such as Papua New Guinea, Laos, the Philippines and Indonesia.”Botswana appears keen to further boots is high reliance on diamond mining. The Permanent Secretary of Ministry of Minerals, Energy and Water Resources of Botswana, Dr Akolang Tombale, said the Government had continued to evolve an enabling investment climate to ensure the ongoing expansion of diamond exploration and mining.The uranium rich African state of Zambia says it expects to have its formal uranium mining policy in place by the end of the year – a move it expects will crystallise much wider uranium exploration investment in the country. According to the Hon Kalombo T. Mwansa, Zambia’s Minister of Mines, no mining licences for uranium had yet been issued in Zambia but that situation would change by early next year.