AMN - Measuring country governance and stability - comment by Yolanda Torrisi

The World Bank Group has launched a diagnostic tool to measure each country’s governance and stability in the mining sector in order to help ease investor decisions.

World Bank Group senior mining specialist Martin Lokanc launched the Mining Investment and Governance Review (MInGov) earlier this year.

Many investment decisions are influenced by the way countries structure their governance. Mining sector governance has a direct impact on investment in resource rich countries as investors monitor the sector’s governance in each country, and reward better performance with a lower cost of capital.

Martin Lokanc was reported saying after the launch: “Resources can yield positive development outcomes if country’s governance is good. The important factors that determine investor decisions are influenced by governance.”

The review was first implemented in Zambia in 2015 as the World Bank Group determined that the country offered the most representative assessment to get a clear picture of how the review should function.

Zambia Minister of Mines and Mineral Development Christopher Yaluma has been applauded for facilitating the MInGov Review to be piloted in his country. “Governance is critical if the mining industry is to have any meaningful impact in society,” he says. “We need to ensure that governance in extractive industries is right so we can maximize returns on our minerals for the benefit of the country.”

Yaluma says that though mining in Zambia continues to be the dominant and leading sector to contribute to the country’s GDP, there is noticeable lack of meaningful participation of locals in the industry.

MInGov Review presents an objective assessment of the mining sector of several countries by offering actionable avenues for reform, supporting transparency, and informing investment decision-making and debate among interested stakeholders.

MInGov Review looks at themes that include policy, legislation and regulation; accountability and inclusiveness; institutional capacity and effectiveness; economic and political environment, and sustainable development.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the African continent. Contact:yolanda@yolandatorrisi.com