Now Reading
Mineral Wealth: IMF Foresees Positive Transformation For Sub-Saharan Africa

Mineral Wealth: IMF Foresees Positive Transformation For Sub-Saharan Africa

The International Monetary Fund (IMF) has said the global transition to clean energy is set to further heighten demand for critical minerals, especially in sub-Saharan Africa. The Fund said this would be aided by demands for minerals for electric vehicles to solar panels to future innovations Between 2022 and 2050, demand for nickel will double, cobalt triple and lithium rise tenfold, according to the International Energy Agency.

“With sub-Saharan Africa estimated to hold about 30 percent of the volume of proven critical mineral reserves, this transition—if managed properly—has the potential to transform the region, the latest Regional Economic Outlook reports. “Sub-Saharan Africa is already at the center of global critical mineral production.

The Democratic Republic of Congo accounts for over 70 percent of global cobalt output and approximately half the world’s proven reserves. South Africa, Gabon and Ghana collectively account for over 60 percent of global manganese production. “Zimbabwe, alongside the Democratic Republic of Congo and Mali, hold substantial but yet-to-beexplored lithium deposits. Other countries with significant critical mineral reserves include Guinea, Mozambique, South Africa, and Zambia,” the Fund said.

It further highlighted that with growing demand, proceeds from critical minerals were poised to rise significantly over the next two decades, adding that global revenues from the extraction of just four key minerals—copper, nickel, cobalt, and lithium—were estimated to total $16 trillion over the next 25 years, in 2023-dollar terms.

“Sub-Saharan Africa stands to reap over 10 percent of these cumulated revenues, which could correspond to an increase in the region’s GDP by 12 percent or more by 2050. Given the volatile nature of commodity prices and the unpredictability over the future direction of technological innovation, these estimates have a high degree of uncertainty—but the general direction is certainly encouraging,” IMF said.

It also pointed out that the region could generate even greater windfalls by not only exporting raw materials but processing them as well. “Raw bauxite, for instance, fetches a modest $65 per ton, but when processed into aluminum it commands a hefty $2,335 per ton, in end-2023 prices. Yet the thousand trucks a day that carry unprocessed lithium from Zimbabwe to ports for shipping to China show that local processing options for critical minerals are too often limited.

“Developing local processing industries could significantly boost value added, create higher-skilled jobs, and increase tax revenues— thereby also supporting poverty reduction and sustainable development. “By diversifying their economies and moving up the value chain, countries will become less exposed to volatile commodity prices, and more able to protect themselves against exchange rate volatility and foreign currency reserve pressures.

“Foreign direct investment can help provide the capital and expertise to develop mineral processing industries, but the absence of a substantial regional market makes local processing investments less enticing. Policymakers need to remedy this,” it noted.

The global lender also hinted that a regional strategy built on cross-border collaboration and integration could create a larger, more attractive regional market for much-needed investment, stressing that regional strategy was also essential to fully leverage the diversity of critical minerals—clean energy technology requires combining multiple minerals scattered across the region. “Sub-Saharan Africa’s anticipated population boom, coupled with rapid urbanization and industrialisation, will likely increase demand for renewable energy and expand the market for processed minerals.

“The African Continental Free Trade Area can play a key role in reducing trade barriers and developing infrastructure, potentially uniting fragmented critical mineral markets for larger-scale operations and forming regional value chains that draw on both raw and processed mineral inputs.

“Coordination can also start on a smaller scale, paving the way for larger regional hubs. For example, the Democratic Republic of the Congo and Zambia are collaborating on battery production for twoand three-wheeled electric vehicles popular in African markets. “Countries also need to collaborate on policies to create more favorable investment and business environments.

Simplifying bureaucratic procedures and harmonizing mining regulations across borders would foster a stable, predictable investment environment. Efforts to minimise the environmental impacts of mining and processing will help unlock new funding and investment opportunities in green finance. Strengthening the Africa Mining Vision, launched in 2009 by the African Union, could serve as a key framework for these regional efforts,” it added.

New Telegraph

See Also



Scroll To Top

We have detected that you are using AdBlock Plus or other adblocking software which is causing you to not be able to view 360 Mozambique in its entirety.

Please add to your adblocker’s whitelist or disable it by refreshing afterwards so you can view the site.