There has, quite appropriately, been much wailing and gnashing of teeth over South Africa's lamentable performance in the Fraser Institute's survey of the enabling environment for mining investment. In terms of one of the Institute's two indices – ‘policy perceptions’ – South Africa is the third worst performer on the African continent.
What this means is that, in the eyes of the senior mining executives polled, the policies and institutions of the continent's oldest and richest mining jurisdiction are better than only two other African jurisdictions, South Sudan and Zimbabwe. Indeed South Africa performs worse on this part of the Fraser Index than the Democratic Republic of Congo.
The Fraser Institute uses two sets of data in its annual report. Its headline index measures 'investment attractiveness'. This is a combination of geological endowment together with the factor measured by its second index – ‘policy perceptions’. This second index consists of 15 sub-categories covering matters such as taxation, environmental regulations, administration and duplication of regulations, uncertainty concerning native land claims, protected areas, labour issues, infrastructure, socio-economic agreements, political stability and related matters, and is the really telling part of the publication.
South Africa does extremely poorly across these 15 indices. Only in one case – 'uncertainty concerning protected areas' – is it in the top half of the index (at position 36).
It is true that South Africa does a little better on the overall ‘investment attractiveness’ index (than in ‘policy perceptions’), coming in at 74 out of 104 jurisdictions assessed.
But the Survey is much more useful than this. Considered over time, its data since 2000 can be used to pinpoint exactly where South Africa is at fault.