Create Good Environment For Investment • AngloGold Ashanti Boss Urges African Leaders

The Chief Executive of AngloGold Ashanti Limited, Mr Mark Cutifani, has urged African governments to provide an environment in which businesses can invest with confidence.

“African leaders must look beyond political and economic ideology and create an environment where the world will bid competitively for its resources — but within the context of improving Africa for and with its people,” he stated.

Mr Cutifani made the call in a presentation on the topic, “The Role of the Mineral Industry in the Economic Development of Africa — Pathway to a better model”, at the Institute of African Studies, University of Ghana, Legon.

His paper is the first of the series of the Annual AngloGold Ashanti Lectures on Business in Africa organised by the Institute of African Studies, in partnership with AngloGold Ashanti Limited.

Mr Cutifani said good governance, expressed through constructive legislation, honest and transparent business practices and focused partnerships must be the starting point for development collaborations.

He drew attention to the fact that Africa was home to 14 per cent of the world’s population and 40 per cent of the world’s natural resources.

“The world needs Africa and Africa needs the world. The nature of this equation provides Africa with an opportunity to develop its natural resources for the world and, more important, for the benefit of its people,” he added.

In view of this, he urged industry and governments to come together with open minds and an understanding that true partnerships reflected a two-way commitment to understand each other’s needs and the willingness to find solutions that were flexible enough to deal with our complex world.

“Governments must be willing to understand the need for certainty when making investments, in addition to understanding input cost structures and the extraordinary pressures that face companies working low margin projects,” he stated.

He added that at the same time industry must be willing to accommodate flexible revenue models, particularly when commodity prices exceeded scope of resource revenue models and/or when, in rare cases, margins generated extraordinary returns while limiting local upside participation.

Touching on the mining sector, Mr Cutifani said the world needed the mining sector to support life and ensure that there was development in an environmentally sensitive and sustainable way.

Citing some research conducted on the impact of mining on the development of economies, he noted, “In Ghana, using the Ghana Living Standards Survey for 1991-1999, income poverty had fallen from 52 per cent in 1991 to 40 per cent in 1999. In the four mining districts, poverty was lower than in the remaining 112 districts in Ghana and outside Accra.”

He said the mining industry in Ghana had been a significant contributor to the development of the country for more than 100 years.

“Through the Obuasi operation and the Ashanti in AngloGold Ashanti, we have been part of the history,” he stated.

He recalled that in 2008 Ghana was the ninth largest gold producer in the world and the mining sector’s direct contribution to the economy was in excess of six per cent, which is consistent with broader African statistics, with an indirect contribution to the economy estimated to be in the 15 per cent to 20 per cent range.

“The mining industry is the third largest tax paying sector in Ghana, with $128 million, representing 15 per cent of total collections. Mining represents 43 per cent of gross export revenues — with 2008 revenues of $2.3 billion,” he added.

Mr Cutifani said AngloGold Ashanti’s Ghanaian heritage was more than just part of a company name, explaining that the people of Ghana remained important shareholders in the company, as well as partners in social and business development within the country.

He lauded Dr Kwame Nkrumah’s contribution to African unity and underlined that the great statesman's vision centred on the concept of a unified Africa.

“That vision appears to have been borne out of an observation and belief that the boundaries that define the nations of Africa are substantially artificial,” he said. Share Your Thoughts on this article Name Email Location Comments Graphic Ghana may edit your comments and not all comments will be published