How Africa's Mineral Resources Can Fuel Its Future

Philip Daniel Yatai
Sep, Sat, 2024

Features , Environment

How Africa’s mineral resources can fuel its future

follow and like on:

161 total views today

By Martha Agas, News Agency of Nigeria (NAN)

Africa is home to 30 per cent of the world`s minerals reserves. When fully harnessed, these resources can play a critical role in the continent`s development story and in the ongoing energy transition.

For instance, gold is a major component of Ghana’s economy. As Africa’s largest producer, it contributes 40 per cent of Ghana’s total export earnings. Ghana was ranked sixth in the world in gold production in 2023.

Nigeria is the largest producer of oil in Africa and ranked among the world’s top 15. The sector accounts for 95 per cent of Nigeria’s export earnings and more than 80 per cent of Federal Government revenue.

Zimbabwe has the second largest platinum deposit and high grade chromium ores in the world. Its mining sector contributes to about 12 per cent of the country’s Gross Domestic Product and 80 per cent of national exports.

The Democratic Republic of Congo (DRC) is the world’s leading producer of cobalt, a critical mineral for the energy transition.

It accounts for more than 70 per cent of global cobalt production, while Mozambique is one of the largest producers of graphite.

Africa is blessed with abundant mineral resources, but their impact on development is not commensurate with the continent`s mineral`s wealth. Many of its countries remain at the bottom of the poverty line, analysts say.

Many African leaders say the continent has been ripped off its wealth, with investors pricing its resources below its value at international markets, mostly due to the lack of value addition policies.

To chart a new course for the continent’s economic development and industrialisation, they resolved to change the narrative through collective efforts.

One of which was the establishment of the African Minerals Strategy Group (AMSG) at the 2024 Investing in Africa Indaba, held in South Africa.

The group, comprising African ministers of Solid Minerals and Mining, aims to help the region advance its mining sector, particularly by ensuring it maximises the benefits of its mineral resources.

The group, chaired by Nigeria’s Minister of Solid Minerals Development, Dele Alake, is also charged with advocating for the formulation of policies on value addition for its minerals, and ensuring maximum beneficiation from their vast mineral resources.

The leaders say it will no longer be business as usual, with minerals being carted away from the region without value addition, as this is essential for developing their local economies in diverse ways.

They agreed that concrete plans for value addition of its minerals must be presented before granting approval for applications of mining licenses to prospective investors, a commitment they vowed to uphold.

Building on these efforts, the 2024 African Natural Resources and Energy Investment Summit(AFNIS), with the theme `Natural Resources for Economic Development` held recently in Abuja was tailored to further drive the process of value addition in Africa.

Alake said that the summit represents a significant milestone in Africa`s collective journey towards harnessing its vast natural resources for sustainable economic development.

It also aimed to send a clear message to the world that Africa will no longer be exploited to the detriment of its development.

The minister emphasised that AFNIS 2024 is a convergence of visionaries, policymakers, industry leaders, and stakeholders, all united by a shared commitment to unlocking the full potential of the continent’s natural wealth.

He described the summit as a platform pivotal, not only to the discourse it fosters, but for the actionable insights and strategic partnerships it will undoubtedly yield.

This is particularly in exploring how Africa’s abundant resources can be leveraged upon to drive economic growth, social equity, and environmental sustainability.

The minister said that AFNIS 2024 provides a unique opportunity to forge partnerships and attract investments that will drive the development of Africa’s Natural Resources.

“We are committed to creating a business-friendly environment that encourages Foreign Direct Investment and fosters mutually beneficial collaborations.

“ By leveraging global expertise, technology, and capital, we can transform our Natural Resources into a catalyst for Sustainable Development.

“ Innovation is a key driver of growth in the Natural Resources Ecosystem therefore we will continue to embrace technological advancements that enhance efficiency, reduce costs, and promote sustainable practices,“ he said.

According to the minister, the journey to transform Africa’s natural resources into a catalyst for sustainable development and inclusive growth is filled with opportunities and challenges, but with unity, determination, and innovation, it is feasible.

Prof. Kelvin Urama, the Chief Economist and Vice President, African Development Bank Group (ADB), underscored the critical role of value addition.

“Continued reliance on commodity exports with little value addition leaves the continent with limited return, and even poorer.

“The real price of commodity exports have been declining over time, and lack of value addition and beneficiation exports jobs, tax revenues, and growth and has high carbon-footprint.

“So, the more a country exports unprocessed natural resources (commodities), the poorer the country becomes. This is because markets pay for value creation,“ he said.

Many experts say the challenge facing Africa is not the presence of mineral resources but the ability to harness them in a sustainable manner to the benefit of all.

Urama, therefore, calls the urgent need for deep reflection on how mineral resources can be harnessed to drive more inclusive and sustainable development in Africa.

According to him, investing in value addition to critical and rare earth minerals, for instance, offers a significant opportunity to mobilise additional domestic resources, complement tax revenues, and support the much-needed natural resource-based industrialisation of Africa.

He recommended that countries develop their own natural resource action plans, focusing on value chain development and natural resources-backed industrialisation.

He also said that African countries should build or mobilise homegrown human and institutional capacity for the successful implementation, monitoring, and evaluation of their policies.

“It is important for African countries to properly account for its natural resources including both stocks and flows, and advocate for tools to account for these in the National Systems of Accounts,“ he said .

Malawian Minister of Mining, Monica Chang’anamuno, said the summit was timely and beneficial for the region, with countries committing to safeguard their minerals at both national and continental levels.

Echoing the sentiments of many other ministers and stakeholders at the summit, she said it was an ideal platform for building partnerships that will advance Africa` economy through value addition and the implementation of policies supporting sustainable development.

Further gains, she said, included knowledge sharing and collaboration aimed at creating job opportunities across the continent.

The Secretary-General of AMSG, Moses Engadu welcomed the `Africa for Africans Initiative, whose Memorandum of Understanding has been signed.

Engadu explained that the initiative would leverage both public and private partnerships, supported by technology to drive the process.

He said the partnership aims to provide both government and technical support to ensure its projects deliver the intended value to their target audience, while also emphasising that Africans have the capacity to tackle their own challenges.

Engadu said at the meeting that plans are under way to establish an Africa Minerals Development Fund (AMDF), modeled after Nigeria’s Solid Minerals Development Fund (SMDF).

He said that the fund will be structured to assist local miners access the required funds across the continent with a view to developing the sector.

Analysts say the vision of accelerated development in the region through effective use of its mineral resources will no longer be a mirage with concerted efforts and political will by its leaders. (NANFeatures)

**If used please credit the writer and News Agency of Nigeria.

follow and like on: