PRI appetite drops for parts of West Africa amid geopolitical instability

By Michael Jones

June 4 - (The Insurer) - Political risk insurers have shown a reduced appetite for underwriting projects in certain West African countries due to rising instability and growing resource nationalism, senior market sources told The Insurer.

Roddy Barnett, head of political risks and trade credit at Beazley, told The Insurer that some underwriters were not willing to insure projects in parts of West Africa, a region that holds a significant proportion of the world’s critical minerals.

Barnett said that rates for West African projects were up 10% to 25%, dependent on jurisdiction, compared to three to four years ago.

He said appetite for Mali had diminished “quite a lot”, while fewer markets are covering risks in Burkina Faso compared to seven or eight years ago.

For the latter, Barnett said rates for lender’s cover were below 1.0% when he first joined the market, compared with around 2.5% to 3.0% today.

Barnett said the increase in rating largely reflected heightened risks rather than a change in broader political risk insurance market conditions.

The main challenges in Mali and Burkina Faso are around Islamic insurgency movements and the ability of domestic security forces to contain them, Barnett said.

More than 400 soldiers have reportedly been killed by insurgents since the start of May in Mali, Niger and Burkina Faso.

Al Qaeda-linked Jama'a Nusrat ul-Islam wa al-Muslimin (JNIM) carried out attacks on Sunday and Monday in Mali. In neighbouring Burkina Faso , JNIM claimed attacks on military positions and the town of Djibo in mid-May in which it said it had killed 200 soldiers.

This instability has come alongside the increased presence of foreign mercenaries, Chinese involvement in the region and a slight retrenchment from the West, said CHC Global senior partner and head of advisory Jerry Smith.

“If the U.S. is withdrawing, then those governments on the ground in Africa can see that there is sort of the initiative has been taken away from the West and therefore there are some advantages to be played,” Smith said.

GEOPOLITICAL COMPETITION AND RESOURCE NATIONALISM

The interest in West Africa from global powers, which is expected to remain for the foreseeable future, comes alongside increased demand for the region’s transition minerals and traditional mining interests, Smith said.

Sub-Saharan Africa holds about 30% of the volume of proven critical mineral reserves, the International Monetary Fund said in April 2024.

“Given the drive to net zero, and the demands of net zero, I think the rare earth metal thing is an absolute point of, I wouldn't say necessarily conflict, but a real source of competition,” said Smith.

Elevated demand and interest had been accompanied by growing resource nationalism from governments in the region, WTW said in a report published in March 2025. This trend has seen countries adopt more protectionist rules around minerals to better profit from their increased importance in the global economy.

Governments in Mali and Burkina Faso , both led by military juntas, are seeking to renegotiate terms with gold miners to gain a bigger share of mining revenue at a time when gold prices have hit record highs. Reforms to mining regulation in the past two years have also occurred in Cameroon, Namibia, Tanzania, Madagascar, Uganda and Zimbabwe.

Beazley’s Barnett said that Mali in particular has become a much more difficult environment to act in due to government action against mining companies, with certain service providers to mining companies exiting the country as the risk is perceived to be too difficult.

High-profile incidents include the dispute between Mali and Canadian mining company Barrick Mining, which resulted in the latter suspending operations at its Loulo-Gounkoto gold complex since January .