By Abdelmonem Fawzi
Africa is not a poor continent. This is common knowledge. This continent contains the world’s largest share of precious metals. Almost every country in Africa has its huge deposit of natural resources.
The problem is that we are the poorest continent in the world. Africa’s per capita income is among the lowest in the world. Africa’s GDP per capita, the lowest in the world, represents only 3% of the word’s income, according to the World Bank. A major slice of African populations still suffers from acute poverty.
The continent also lags behind in other economic growth and development indicators. The fight against poverty has not been too successful in the continent. It is clear that we fail to invest our resources and use them in the right way.
The African Minerals Development Centre (AMDC) held a forum recently to address this problem. The forum was titled, ‘Africa’s Mining Vision in the Time of Green Energy Transition and Digitalization: Challenges and Opportunities’.
The first African Forum on Mining was held in November 2019.
African Union Commissioner for Economic Development, Trade, Industry and Mining, Albert Muchanga, said Africa’s vast mineral wealth (30% of the world’s mineral deposits) should be an important driver of the continent’s structural transformation, as enshrined in Agenda 2063.
“Oil, gas and minerals account for 70% and 50% of African countries’ exports and revenues respectively,” he said. “This mineral wealth helps Africa play a central role in the energy transition agenda in the dangerous era of climate change.”
He noted, however, that despite the continent’s enormous mineral industry potential, most African countries have historically been unable to fully benefit from their natural wealth.
Muchanga said Africans remained producers and exporters of mineral raw materials, a low rank in the global value chain.
He described Africa’s high dependence on extractive exports as a ‘major vulnerability’ that exposes the continent to the boom-and-bust cycles associated with commodity prices as well as Illicit Financial Flows (IFFs).
Muchanga revealed that IFFs from Africa hover around $90 billion annually.
“Thus, the Africa Mining Vision (AMV) aimed to manage Africa’s mineral resources for the benefit of Africans, while the AMDC Phase II seeks to reenergize the AMDC stakeholders towards creating a greater momentum for the implementation of the AMV,” he said.
Muchanga noted that significant quantities of minerals needed for the energy transition and green industries are also found in Africa.
Africa, he said, hosts 6% of global copper reserves, 53% of cobalt, 25% of bauxite, 21% of graphite, 46% of manganese, 35% of chromite, 79% of phosphate rock, 91% of platinum group metals.
“We can add to the foregoing: hydrogen, water, wind and solar power,” Muchanga said.
Acting Executive Secretary of the Economic Commission for Africa (ECA), Antonio Pedro, said the adoption of the AMV in 2009 by AU heads of state and government aimed to boost mining’s linkages with the broader economy.
He added that the launch of AMDC Phase II seeks to change the current narrative by facilitating a vibrant resource-based industrialization on the continent to create Africa’s prosperity.
“It is no secret that Africa was home to huge natural resources, including arable land, rivers and water bodies, solar and bio thermal potential as well as vast reserves of oil and gas,” Perdo said.
He cited confirmation by the Mining Contribution Index that 10 out of the Earth’s top 15 mining countries were in Africa.
“Yet, the majority of our countries still export mainly raw or unprocessed commodities,” Pedro said. “Two-thirds of the continent’s exports, on average, are raw and unprocessed goods.”
He noted that for almost half of African countries, 10% of output and half of exports come from extractive sectors based on low value-addition.
“We know what the effects of this are: vulnerability to commodity price swings, limited capture of revenues from mineral-based products, and so forth,” the ECA chief said.
To this end, Pedro said the launch of AMDC Phase II represents a paradigm shift in Africa’s mining sector, one in which mining does not operate in a silo, but as a catalyst for diversification and industrialization.
He advocated collaboration between governments, businesses, labour groups, communities, and financiers to operationalize the AMDC and outline a new approach to industrial policy for mineral value-addition.
“To break the enclave nature of mining, local content policies must have an expanded definition to mean high-value goods and high-level employment to ensure local ownership of suppliers and links with other sectors,” Pedro said. “Strong local content policies can lead to a three-fold increase in non-mining economic activity.”
He noted that local content policies must also be backed by support for local suppliers to develop skills and capacities.
However, only three of the eight states that signed the AMDC Phase I had ratified it.
The problem is that a minimum of 15 ratifications is required for the statute to come into force and the AMDC to be operated in full.
For Africa to realize the objectives of the AMV and the AMDC, member states need to scale up and expedite the ratification process.
It remains to be said that the problem of growth and underdevelopment in Africa is caused by excessive dependence on the outside world.
The outside world does not aid Africa, but it is Africa that aids the outside world.
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