Africa’s vast reserves of crucial minerals and renewable energy resources offer a unique opportunity to develop local value chains and foster green growth, as suggested by experts during the Africa Investment Forum (AIF) in Morocco this December.

The continent is estimated to hold 95% of the global supply of chromium, 90% of platinum group metals, two-thirds of cobalt, 30% of lithium and manganese, and 20% of graphite. With forecasts indicating that the electric vehicle and battery market will grow from $7 trillion in 2030 to $59 trillion by 2050, Africa is poised to play a vital role in this shift.

Investors, entrepreneurs, and industrialists from Africa and Asia participated in a panel discussion at AIF aimed at exploring how to harness the rising 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 emphasized the importance of local processing and value addition. By processing minerals continentally, Africa can increase the value of its exports and generate employment, revitalizing local economies.

Dr. Kodjo Busia, Executive Director of Green Africa Minerals operating in Tanzania and Dubai, noted that post-colonial raw material export patterns persist even after independence, citing the infamous structural adjustment policies of the 1980s and 1990s that failed to achieve industrialization.

Evolving Development Model

However, he conveyed optimism that a change is in progress. “African leaders have realized the importance of adding value to our resources to fully utilize our natural wealth,” he remarked.

He highlighted that this shift is reflected in the 2008 Africa Mining Vision strategy, designed by the Mineral Development Center in Ethiopia, which aims to reshape export patterns through policy incentives, skill development, and regional value chains.

Samuel Olu Faleye, whose company SAGLEV Inc. produces electric vehicles (EVs) in Lagos, pointed out the growing demand for EVs, stating: “In the past year, operating ride-hailing services without an electric vehicle has become nearly impossible.”

With over 6,000 ride-hailing drivers needing vehicles, he emphasized the financial hurdles: “The financing gap for electric vehicle acquisitions is significant, particularly given the rapid changes in the industry.”

Faleye advocated for blended financing and public-private partnerships to develop charging infrastructure, suggesting that industrial hubs could pool resources, services, and expertise.

Enhancing Bilateral Partnerships

Tatsushi Amano, Managing Executive Officer at Japan Bank for International Cooperation (JBIC), discussed the evolving landscape of development finance, stating, “Currently, many Export Credit Agencies are shifting their focus towards development finance.”

He explained that JBIC has expanded its mission from merely supporting Japanese exports to financing projects that provide essential materials for Japanese industries. Amano noted that budget limitations are not the main challenge; instead, it’s the lack of access to specialized knowledge. “Gaining expertise on various fronts will be crucial for realizing tangible benefits,” he emphasized.

Catherine Zhang, Vice Chairman of the China Africa Business Council and President of Rockcheck Group, highlighted the growing trade relationship between China and Africa, noting, “This year, trade between China and Africa has reached $282 billion.”

Her company, established by her parents three decades ago, originally focused on steel production and now imports over 10 million tons of iron ore annually, with Africa being a key part of its supply chain.

Catherine Kim, Director of Corporate Relations at the South African Chamber of Commerce in Korea, discussed her country’s journey from poverty in the 1960s to becoming a donor nation.

She underscored South Korea’s current supply chain challenges, stating, “87% of our production relies on trade, making us very vulnerable to supply chain disruptions.” This situation has driven Korean manufacturers to pursue new partnerships in Africa, including investments in Zambia’s mineral sector by companies 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 promoting local value addition in the green minerals sector. “Africa will not revert to old industrialization methods when engaging with green minerals… We aim to move up the value chain,” he asserted.

He reiterated Africa’s readiness for transformation, supported by institutions like the Africa Finance Corporation and the African Development Bank. “We will leverage equity and mobilize debt to facilitate this transformation,” he concluded.