The Democratic Republic of Congo (DRC) has risen to the top of a risk ranking of 198 countries, amid an environment of rising nationalistic tendencies and protectionist policies across the globe. 

Verisk Maplecroft’s Resource Nationalism Index (RNI), which considers issues such as regulatory climate, increasing tax pressures and changing contractual terms, says about 30 countries, including 21 major producers of oil, gas and minerals, have seen a substantial rise in the risk of resource nationalism. The RNI ranked both the DRC and Russia (in fourth position overall) in the ‘extreme risk’ category.

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Other countries ranked as ‘extreme risk’ – where the risks to businesses of governments taking greater control of natural resources is highest – include Venezuela (which was joint first with the DRC), Tanzania (in third place), North Korea and Zimbabwe (joint fifth), Eswatini, which was formerly known as Swaziland (seventh), and Papua New Guinea (eighth).

The DRC climbed five places to lead the index due to its new Mining Code, which has enabled the government to increase interventionism in the sector and impose onerous fiscal terms on existing operators. Since the code came into law in June 2018, the government has tried to block commercial asset transfers, usurp operators to glean more profit and choked exports from a cobalt mine.

Since 60% of the world’s reserves of cobalt – a vital component of lithium-ion batteries for electric vehicles – are found in the DRC, rising resource nationalism threatens an essential modern industry. “The situation in DRC won’t improve any time soon,” said Verisk Maplecroft Africa analyst Indigo Ellis. “The new president, while seemingly a change from the old guard of president Joseph Kabila, will not represent a significant departure from the status quo for mining regulation.”

While the research found outright expropriation is less of a risk than it used to be, Venezuela and Russia ranked highest in this regard. Then again, well-recognised risks, such as political instability, high levels of government interference and international sanctions, mean foreign companies have a limited presence there in these countries.

On the positive side, 24 countries have witnessed a significant improvement in their RNI performance, including Zimbabwe (joint fifth), Vietnam (25th), Ecuador (46th) and Guinea (94th). Despite needing significant improvements in its investment climate, Zimbabwe is home to the world’s second largest reserves of platinum and chromium, alongside major deposits of gold, diamonds and iron ore, meaning it has huge potential to attract foreign investment.

Since president Lenin Moreno came to power in 2017, Ecuador has improved significantly from ‘extreme’ to ‘medium' risk, following a shift away from previously authoritarian left-wing policies and a clampdown on corruption.