“You don’t want to kill the goose that lays the golden egg – the mining industry – which is still very new, very much in its infancy and has the potential to really transform the economy. At the same time the government needs to get its fair share of mining revenues,” RMB country risk analyst Ronak Gopaldas told CNBC Africa.
“What’s important to acknowledge, is that the mining code is still under debate, nothings been ratified yet, and dialogue is on-going between the mining community as well as government stakeholders.”
Burkina Faso’s economic outlook for this year is expected to be 6.7 per cent or higher compared to last year and Gopaldas believes that the country’s mining industry could be a game-changer.
“It’s really trying to position itself as the favoured investment destination for international mining companies and I think it has a lot of advantages at its disposal. If you look at the trends in the industry, it’s grown at 170 per cent every year for the past five years,” he explained.
“It’s now the fourth biggest gold producer in the world. From 786 kilogrammes, it’s now producing close to 40 tonnes. Industry growth has been quite rapid and the momentum is there but the new mining code is something that investors will be watching quite closely.”
Gopaldas insisted however, that there is good dialogue and communication between the mining sector and the government at the moment.
“One of the key themes that’s playing out across the continent is the desire for a greater share of government tax in the mining industry. It’s not something that’s exclusive to Burkina Faso but it is something that investors need to watch and it needs to be communicated effectively to them,” he said.
“Passing it by the end of this year is going to be very difficult. Realistically you’re looking at, earliest, Q1 next year.”