This report 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, 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.
