This article is part of a series crafted in collaboration with the African Development Bank to celebrate its sixtieth anniversary. Visit our dedicated portal to delve into the Bank’s legacy and its current initiatives across the continent.
Africa’s abundant reserves of key minerals and renewable energy resources present a unique opportunity to create local value chains and stimulate green growth, as emphasized by experts at the Africa Investment Forum (AIF) in Morocco this December.
The continent reportedly holds 95% of the global chromium supply, 90% of platinum group metals, two-thirds of the world’s cobalt, 30% of lithium and manganese, and 20% of graphite. With estimates suggesting that the market for electric vehicles and batteries will rise from $7 trillion in 2030 to $59 trillion by 2050, Africa is poised to play a vital role in this transition.
During a panel discussion at AIF, investors, entrepreneurs, and industrialists from Africa and Asia examined how to capitalize on the growing demand for Africa’s essential minerals, driven by the energy transition. Supported by the Japanese government and the Fund for African Private Sector Assistance (FAPA), the panel highlighted the importance of local processing and value addition. By processing minerals on the continent, Africa can boost the value of its exports and generate employment opportunities, revitalizing its local economies.
Dr. Kodjo Busia, Executive Director of Green Africa Minerals, which operates in Tanzania and Dubai, noted that the post-colonial patterns of raw material exports persist even today, referencing the well-known structural adjustment programs of the 1980s and 1990s that failed to achieve true industrialization.
Transforming the Development Model
However, he expressed optimism that a shift is occurring. “African leaders have recognized that it’s time to enhance the value of our resources to fully optimize our natural wealth,” he said.
He pointed out that this shift is evident in the 2008 Africa Mining Vision strategy, created by the Mineral Development Center in Ethiopia, which aims to change export patterns through policy incentives, skill development, and the establishment of regional value chains.
Samuel Olu Faleye, whose company SAGLEV Inc. produces electric vehicles (EVs) in Lagos, highlighted the rising demand for EVs, stating: “In the past year, it has nearly become impossible to run ride-hailing services without an electric vehicle.”
With over 6,000 ride-hailing drivers in need of vehicles, he emphasized the financial hurdles: “The funding gap for electric vehicle purchases is significant, especially amid the rapid changes in the industry.”
Faleye advocated for blended financing and public-private partnerships to build charging infrastructure, suggesting that industrial hubs could collaborate to share resources, services, and technical expertise.
Strengthening Bilateral Partnerships
Tatsushi Amano, Managing Executive Officer at the Japan Bank for International Cooperation (JBIC), spoke on the evolving nature of development finance, stating, “Currently, many Export Credit Agencies are shifting towards development finance.”
He elaborated that JBIC has expanded its focus from merely facilitating Japanese exports to financing projects that produce essential materials for Japanese industries. Amano noted that budget limitations are not the main barrier; rather, it’s the absence of access to specialized knowledge. “Gaining expertise on various issues will be crucial for realizing tangible benefits,” he asserted.
Catherine Zhang, Vice Chairman of the China Africa Business Council and President of Rockcheck Group, emphasized the growing trade relationship between China and Africa, stating, “This year, trade between China and Africa has reached $282 billion.”
Her company, founded by her parents three decades ago, initially concentrated on steel production and now imports over 10 million tons of iron ore annually, with Africa being a vital part of its supply chain.
Catherine Kim, Director of Corporate Relations at the South African Chamber of Commerce in Korea, recounted her country’s journey from poverty in the 1960s to its current status as a donor nation.
She noted South Korea’s ongoing supply chain challenges, stating, “87% of our production is dependent on trade, rendering us highly susceptible to supply chain disruptions.” This has prompted Korean manufacturers to forge new partnerships in Africa, including investments in Zambia’s mineral sector from firms like Samsung and LG.
Solomon Quaynor, African Development Bank Group vice president for private sector, infrastructure, and industrialization, concluded the panel discussion with a strong commitment to fostering local value addition in the green minerals sector. “Africa will not go back to outdated methods of industrialization concerning green minerals… We aim to move up the value chain,” he proclaimed.
He reiterated Africa’s readiness for transformation, supported by institutions such as the Africa Finance Corporation and the African Development Bank. “We will utilize equity and mobilize debt to facilitate our transformation,” he concluded.
