Harnessing natural resources endowments: Key to Africa’s development

Last Updated 13 years ago by Kenya Engineer

Africa is the world’s top producer of numerous mineral commodities and has the world’s greatest resources of many more, but most of Africa still lacks systematic geological mapping which could bring to light a much greater resource base. Unfortunately, most of Africa’s minerals are exported as ores, concentrates or metals, without significant value-addition. There is thus a large potential for mineral beneficiation.

Africa also has significant known resources of fossil fuels (oil, gas and coal) and has large biomass and bio-fuels potential (ethanol, bio-diesel), especially in the tropics. In addition, it has massive hydro-electric potential (e.g. Inga 45GW, Congo River 200GW) and largely un-assessed geothermal potential along the Great African Rift Valley.

Africa’s dire need to industrialise is universally acknowledged. The structural transformation of our economies must be an essential component of any long-term strategy to ensure the achievement of the Millennium Development Goals (MDGs) in Africa, eradicate poverty and underpin sustainable growth and development across our continent. The key issue, however, is in the formulation and implementation of workable industrialisation strategies based on our continent’s unique strengths, rather than the emulation of strategies that may have been effective in other contexts.

A resource-based African industrialisation and development strategy must be rooted in the utilisation of Africa’s significant resource assets to catalyse diversified industrial development, as was successfully implemented by several erstwhile resource-based economies in the developed world such as in Finland, Sweden, Germany (especially in the Ruhr region), and the US over a century ago and to some extent in more recently in middle income countries Malaysia, Brazil and South Africa.

Continued innovation and human resources development are key to reducing the dependence on the initial factor endowment (natural resources) and to building and sustaining a locally embedded, competitive and diversified economy.

Conversely, where there is underdeveloped human, knowledge, physical and institutional capital, as well as governance deficiencies, insufficient innovation systems, low rates of technology awareness and progress, and inefficient economic and business organization, it is impossible to turn the initial factor endowment into a platform to build successful clusters and diversified economies.

Source: Africa Mining Vision, paper 2009