Running the numbers - African Natural Resources Center - Analytical Report
Categories: African Natural Resources Centre
This report, the first study in Africa, explores how African governments use financial models to manage oil & gas and mining projects. Jointly produced by the African Natural Resources Center of the AfDB and Open Oil, a boutique financial advisory firm, the study begins with the simple notion that no investor would ever approach an investment decision on an extractive project without the backing of a comprehensive financial model. Such a model would link expected production profile, prices, capital and operating expenditure and corporate tax rates to the projected cash flow of the project and its profitability. The authors conducted a survey of nearly 50 government officials to illustrate how widespread use of financial models is and how their results are used to inform policy.