Country risk and government take in Africa's mining sector

Risque pays et prise gouvernementale dans le secteur minier en Afrique

Isaac Amedanou and Bertrand Laporte
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Isaac Amedanou: CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne

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Abstract: A multinational firm's decision to invest in a mining project depends on a complex decision-making process that considers the physical and economic characteristics of the mine, the mining tax design, the reliability of the host country's government in meeting its commitments.... and, consequently, the various risks that condition the expected profitability of the investment. Changes in government policy and/or political institutions could affect the investment behaviour of multinationals, as the risk premium is introduced into any investment project and, therefore, the location decision is influenced by political risk. Governments, which need foreign investments to extract resources, cannot ignore the strategies of multinational firms when defining their mining tax design.

Keywords: Government take; Gold; Tax legislations; Country risk; Political regime; Transparency; Africa; Prise de position du gouvernement; Législations fiscales; Or; Risque pays; Régime politique; Transparence; Afrique (search for similar items in EconPapers)
Date: 2024-02-05
New Economics Papers: this item is included in nep-afr
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Published in 2024

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