Gargett speaking on the second day of the three day Paydirt 2017 Africa Down Under Mining Conference in Perth, Australia, said the timing of this improvement was ideal, this coinciding with the resurgence of the mining sector, which has been a key driver of economic growth on the continent.
"Africa is changing. The political environment has stabilised," Gargett said.
"Despite the challenges the mining industry has faced in recent years, increasing commodity prices, the levels of global investment pouring back into resource projects, and the market rebound for mining services companies, shows positivity has clearly returned to the sector."
He added that against this increasingly positive backdrop, opportunities are abundant for African countries to capitalise on this market environment and attract the capital to develop the resources of their continent.
"However, we are seeing African governments increasingly looking for larger returns from mining operations in their country through increased taxes, royalties and/or increased free-carry stakes in the mines themselves.
Whilst African governments are grappling with the challenges of a lagging fiscal return to current positive market conditions, are they really taking ‘two steps forward and one step back’?” Gargett said.
Gargett used the conference to unveil PwC's latest report, Two steps forward, one step back - the African tax landscape "an economic analysis of a standard gold mine operating under the same conditions, with the same assumed capital and operating costs," this across Tanzania, Namibia, Ghana and Egypt.
He said the question still remained how African countries capitalise on the positive market conditions to strike the right balance between tax and revenue measures, while still allowing sufficient return on the capital invested by miners to allow these investments to occur in the first place?
He referred to analysis by PwC showing that Namibia continues to be the only country which generates a sufficient Internal Rate of Return (IRR) to allow a clear decision for the mine to go ahead.
According to a statement the same results shows that no mining project would be viable in Tanzania given the recent changes to its tax laws.
Gargett said: "Despite the introduction of a one per cent export levy in Namibia since 2015, it continues to be the only country which generates a sufficient IRR to allow a clear decision for a mine to proceed. The current fiscal regime makes the project marginal in Ghana where the IRR threshold is just below the target threshold of 25 per cent."
He said that the significant changes to the tax regime in Tanzania have resulted in an IRR of just 18.3 per cent, which would mean that there would be no viable project in Tanzania.
"Egypt (on the face of it) also has an IRR below the required investment threshold of 25 per cent." he added. According to Gargett, while the Namibian tax take at first glance may appear lower than the other countries, it is the only country that is most likely to receive any taxation revenue at all.
"Namibia has maintained its status as the most attractive destination of our sample countries for foreign mining investment capital. For Namibia, this means the generation of government revenues of US$435 million over the life of the mine and foreign direct investment of US$200 million spent constructing the mine," he said.
"Over the life of its operations expenditure of US$1.1 billion and sustaining capital of US$150 million are spent in country. The mine has ongoing employment of 1,100 people." Gargett pointed out that even though the mineral resources in the ground are not mobile, the capital that funds the development of the resources still is.
"So the race is on between nations to attract the investment dollar," Gargett concluded.