USA/Africa Dialogue, No 414: Botswana's Wealth

Botswana is third in global rankings in terms of investment risk in the mineral sector, according to Resourcestocks' Annual World Risk Survey of the global mining industry during 2004. This is likely to boost investor confidence in the country's mineral sector.

The internationally authoritative report indicates that Botswana has now overtaken the United States to occupy third position in the global rankings, just below Australia and Canada. The United States has now dropped to fifth position, which was previously occupied by Botswana, while Chile has held on to its fourth spot for the second year in a row.

In addition to Botswana, for the first time this year's survey also has two other African countries, Ghana and Tanzania, in its global top 10. The annual World Risk Survey is conducted among resource sector leaders located around the world who allocate scores of between "0", or "no risk", to "5" or "maximum risk", in 10 different categories: Sovereign risk, land access, green tape, land claims, red tape, social risk, infrastructure, civil unrest, natural disasters, and labour relations.

In the summary, the report's authors observe of Botswana that: "This small land-locked southern African country has been a star since joining the list last year when it opened at a surprising fifth. This year's third is an even bigger surprise and might ruffle a few feathers south of the border down South Africa way.

"Diamonds changed the finances of Botswana, but a fiercely independent government which is doing all it can to encourage foreign investment, especially foreign mining investment, has elevated Botswana to a new status as one of the world's most attractive investment destinations, especially for explorer/miners. Capping off the appeal of Botswana is its score of just 31 on the WMRC Corruption Index."

Botswana scored at "2" or better in all categories but infrastructure, which was rated as "3". In the same category Australia, Canada and the United States were rated "1", Chile "2" with all other countries also scoring no better than "3".

Overall this year's survey concluded that the world had become less risky for miners to do business with key African countries, with China and Russia posting the most notable gains.