Zambia’s position in the latest Fraser Index has plummeted. The country’s placing in the index, which measures how a country is seen as a mining investment destination, has fallen from 30 to 58 – a very big drop.
You may be tempted to ask: “Does this matter?” The answer is that it does. Although the index is not based on hard data – but rather the perceptions of mining company executives – these perceptions influence investment decisions.
If a country is perceived as a risky investment destination, international companies will not build mines, factories, or open branches of their businesses in that country. One would be entitled to again ask: “Does this matter?” The truth is – it does.
International investment into any country should be welcomed. International investment – especially fixed investment (where investments lead to the construction of factories, or mines, or other fixed assets) – has many positive outcomes.
Increased investment leads to more jobs, can boost the productivity of the receiving country, creates additional tax revenue for the government, as well as seeing the transfer of skills and technology to people and businesses in the host country.