Transforming Africa to capitalise on critical minerals requires dramatic strategy shift

This was highlighted by UN Economic Commission for Africa (ECA) deputy executive secretary and chief economist Hanan Morsy, speaking at the Ministerial Forum on Critical Minerals, Value Chain and Beneficiation on July 10, in Abidjan, Côte d’Ivoire.

Morsy highlighted that the continent hosted about 30% of global critical mineral reserves, yet captured less than 5% of the associated value added.

“That statistic should concern us far more than the size of our reserves. It tells us that our challenge is no longer geological. It is economic and institutional,” she warned.

Therefore, she posited, the focus should be on what terms Africa participated in the global energy transition.

As such, she proffered three strategic shifts.

First, Morsy advocated for a move from resource nationalism to regional industrialisation.

“Many countries understandably aspire to develop domestic processing industries. But the economics of critical minerals rarely stop at national borders. Battery value chains require minerals, energy, transport infrastructure, processing capacity, manufacturing capability, finance and markets. Very few countries possess all these ingredients individually.

“Africa’s comparative advantage, therefore, lies not in 20 competing national strategies, but in integrated regional value chains under the African Continental Free Trade Area (AfCFTA), where countries specialise according to their comparative advantage while collectively capturing far greater value. The success of our minerals agenda will depend less on what happens inside mines than on what happens across borders,” she posits.

Second, she called for beneficiation to be redefined.

“Too often, beneficiation is interpreted narrowly as processing minerals before export. That is necessary, but it is not sufficient. The real value lies further downstream, in precursor materials, battery components, electric mobility, fertilisers, green steel, advanced manufacturing, recycling and the knowledge economy that surrounds these industries.

If we define success only as refining minerals, we risk remaining suppliers in someone else’s industrial strategy,” Morsy predicted.

She said the continent’s objective should be to build industrial ecosystems, not simply processing plants.

Third, Morsy stressed that financing must become as strategic as geology.

“Africa does not lack investment opportunities. It lacks sufficiently prepared, derisked, bankable projects capable of attracting long-term capital.

“That is why initiatives such as the Critical Minerals Acceleration Facility and the New African Financial Architecture for Development are potentially transformative. They shift the conversation from financing extraction to financing industrial ecosystems. They also recognise that African pension funds, sovereign wealth funds and development finance institutions should become central investors in Africa’s industrial future, rather than passive investors elsewhere,” Morsy explained.

She highlighted that the partnership between the ECA and the African Development Bank (AfDB) could play a key role here.

The ECA contributes policy analysis, implementation support, regional value chain design under the AfCFTA, and analytical work on the African Green Minerals Strategy, while the AfDB brings project preparation, financing, guarantees and the capacity to crowd in private capital, Morsy explained.

“Together, we can bridge the persistent gap between policy ambition and investment execution,” she asserted.