Value-addition: Africa’s growth tonic

Lazarus Sauti

Africa is known for its abundant resources. It is richly endowed with a variety of natural resources including oil, diamonds, gold, iron, cobalt, uranium, copper, bauxite, silver, petroleum and cocoa beans, woods and tropical fruits.

A good number of these rich natural resources-endowed countries are found in the Southern African Development Community region.

To show that the continent is resource endowed, five countries dominate Africa’s upstream oil production. Together they account for 85 percent of the continent’s oil production and are, in order of decreasing output, Nigeria, Libya, Algeria, Egypt and Angola.

Other oil-producing countries are Gabon, Congo, Cameroon, Tunisia, Equatorial Guinea, the Democratic Republic of the Congo, and Cote d’Ivoire.

Exploration is also taking place in a number of other countries that aim to increase their output or become first time producers. Included in this list are Chad, Sudan, Namibia, South Africa and Madagascar while Mozambique and Tanzania are potential gas producers.

Ore resources in Africa are also abundant, at a time when other continents are beginning to face depletion of resources.

More so Africa is emerging as the next frontier in the gas industry, and is becoming an integral part of the global energy mix. This is especially true for natural gas discoveries in East Africa.

Wood Mackenzie, a global energy, metals and mining research and consultancy group with an international reputation for supplying comprehensive data, written analysis and consultancy advice, estimates that 100 trillion cubic feet of gas has been discovered in Mozambique and Tanzania, and ranks the Rovuma Basin (in Mozambique) as one of the most prolific conventional gas producers in the world.

Without doubt, natural gas can play an important role in meeting the future energy needs of the continent.

Frankly, Africa is the richest continent on earth from a natural resource point of view. Sadly, the continent is poor because much of Africa’s natural resources are barely developed and harnessed.

“Despite Africa being heavily endowed in mineral resources, earnings are still insignificant because the minerals are being exported in raw form,” Zambian Vice-President Guy Scott recently said.

McKinsey & Company, a global management consulting firm, agrees: “Africa’s significant natural resources are being extracted and exported in their raw form… and as a result Africa has not developed a robust manufacturing sector, leaving the continent vulnerable to commodity downturns and price shocks.”

To transform the economies of African countries, the continent needs to develop its raw materials within its own borders, as a means to create more robust, diversified and sustainable economic growth.

Africa can simply transform her economy by developing raw materials because manufacturing gets the bulk of its resources from these raw materials. This is a according to Mike Bimha, Zimbabwe’s Minister of Industry and Commerce.

To do this, African countries must improve energy and transport infrastructure – key enablers to productivity and socio-economic development and at the same time invest in modern technologies.

Importantly, the development of raw materials should take in value addition and beneficiation.

According to the Zambian Vice President, raw material development, in the form of value addition to Africa’s raw materials, is crucial in order to ensure maximum benefits and to improve living standards of Africans.

VP Scott, therefore, urged Africa to graduate from exporting raw mineral resources by promoting industries that will ensure value addition to the resources.

Sharing same views, Zambia’s Minister of Mines, Energy and Water Development Christopher Yaluma says: “Raw material development is a tonic to Africa’s development. Thus, the promotion of raw material development is crucial in order to enhance the value of raw materials and to improve the competitiveness of African industries.”

Dr Ibrahim Doko Hussaini, an expert in raw material development, believes: “Africa must organise strategic plans at developing raw materials and attracting constant commercialisation of natural resources that would encourage their utilisation as well as the rapid development of local industries in the continent if the continent is to benefit from its natural resources.”

Hussaini also urged African countries to intensify efforts towards innovations and technology-based development of industrial raw materials for domestic use and export so as to meet the requirements of knowledge-based economies.

African countries need to craft strong policies to benefit from natural resources. Augustine Kasanda Ngoy, general-secretary of the Democratic Republic of Congo Ministry of Mines says, “There is need for African countries to harmonise their policies in order to realise maximum benefits from natural resources.”

Raw material development is crucial for Africa’s development. Thus, experts, political leaders and all stakeholders in the science and development sector need to stand together with a new mindset, and rise to the challenge of promoting economic transformation through effective development of raw materials/natural resources.