What investors can expect from elections in CAR

After much delay the citizens of the Central African Republic (CAR) are set to head to the polls on Sunday, but the implications for miners in the region are still unclear.

Francois Bozize, the current president, is favored to win. Even if he should, however,
Onlookers say stability won’t come easily to the landlocked nation which sits just north of the Democratic Republic of the Congo.

“The outlook overall is fairly grim,” Roddy Barclay, an analyst with Control Risk says via telephone from London. “I think the election will be more of a challenge than an opportunity as we are unlikely to see any significant improvement. After the elections are over, weak state institutions and corruption will continue to characterize the country.”

Barclay also points out the opposition parties are already arguing that voter’s lists have been completed only recently and that they have had merely two weeks to campaign.

“Bozize has all the benefits of incumbency and he is controlling the electoral process,” Barclay says. Although, he concedes, the president has managed to broaden his political base by bringing former rebels in as his advisors.

Despite that move, Bozize’s government is seen as maintaining control over the south western and south central parts of the country – areas that surround the capital of Bangui.

Toronto-based gold junior, Axmin (AXM-V) has its Passendro gold project located in south-central region of the country, and has not reported any difficulties with rebel groups over its many years of operating in the country. The company is currently in the midst of updating its feasibility study on Passendro as it looks to drive the project into production.

South African based Randgold Resources (GOLD-N, RRS-L) and French-based Areva, also have interests in the country.

The former French colony of 4.6 million people is rich in gold, uranium and diamonds.

As for positives that an election could bring, Barclay was cautious with his optimism.

“The best case scenarios is that there is no major violence and that Bozize wins by a large enough margin that challenges are silenced out and he can continue with security sector reform,” he says. “It will be crucial for him to impose governance outside of Bangui.”

On the other side, Barclay frames the worse case scenario as having a shambolic election followed by numerous challenges and an armed coup.

While he says such a scenario can’t be entirely ruled out he believes the chances of it occurring are low.

“Most likely what will happen is that the country will muddle through messy challenges with vocal opposition saying the government is not credible,” he says.

Bozize seized power in 2003 through a coup, and then was elected to the office in 2005.

While there is a total of five presidential candidates, only two are considered legitimate contenders: Ange Felix Patasse and Martin Ziguele.

Patasse was the president who was ousted by Bozize in 2003, while Ziguele served as Patasse’s prime minister and ran against Bozize in the last election.

Patasse has only recently returned from exile.

If none of the three men can wins an outright majority in the first round, a second will be held in March.

The elections have been delayed three times and were suppose to occur in April of 2010. The delays were blamed on a lack of financing and interference from rebel groups.