SOUTH AFRICAN MINING TO GET VENTURE CAPITAL INCENTIVES
By Antonio Guerrero
South African finance minister Pravin Gordhan will grant a major venture capital incentive for SME mining companies.
South Africa: Investing in small mining operations
South African finance minister Pravin Gordhan will grant a major venture capital incentive for small and medium-size mining companies to support the sector’s expansion. The government’s Industrial Development Corporation will establish a fund to provide around $3.3 billion a year to emerging mining companies. The country’s mining sector, though benefiting from high commodities prices, has been hit by work stoppages and safety issues that have curbed output. Authorities hope that opening the sector to smaller players will support economic recovery plans. The nation’s economy, Africa’s largest, is expected to grow by 2.7% this year, compared with a regional average of 5.5%.
Nigerian president Goodluck Jonathan will reportedly call on World Bank officials to review all federal government contracts, in a bid to add greater transparency to the procurement process. Although the president has discussed the plan, the World Bank has not confirmed that any such arrangement has yet been established. Jonathan has expressed concerns over charges of rampant bribery in the issuance of government contracts. However, critics charge he has not launched the National Council on Public Procurement—which was announced in 2007 and intended to improve procurement governance—while others question the cost of involving World Bank officials or the amount of power they would wield.
African nations continue to push for a single currency. Naoyuki Shinohara, IMF deputy managing director, in a podcast in March warned that the East African Community, a proponent of a single currency, has a smaller savings pool than Europe that members can tap for low-interest loans. Paul Collier, director of the Centre for the Study of African Economies at Oxford University, said during a recent African monetary union summit that the EAC is not ready for a common currency. He said that first a regional central bank must be set up, along with guarantees of central bank autonomy for member countries. By contrast, the Economic Community of West African States, another African economic bloc, expects it will have its own common currency—the Eco—by 2020. Creation of the Eco was initially set for 2015, but was postponed due to the global economic crisis.