AFRICA has a large quantity of natural resources and vast potential to spur the continent’s economic development.
Frankly, Africa is the richest on earth from a natural resources’ point of view but, sadly, the continent is poor, perhaps the poorest, because much of its natural resources are barely developed and harnessed. Development of raw materials is a tonic to Africa’s development.
The continent in general is richly endowed with natural resources, including oil, diamonds, gold, iron, cobalt, uranium, copper, silver, wood and tropical fruits. Yet much of these resources are undiscovered or barely harnessed.
The low levels of investment to explore with a view to adding value to these resources means more is yet to be done to Africa’s resources.
Value-addition to raw materials is key to transforming the African continent.
Whether Africa will ever benefit from its natural resources is a question that is more relevant now than ever before.
The Southern African Development Community (SADC) Heads of State and Government Summit opened yesterday in Zimbabwe’s Victoria Falls town with the regional bloc’s new chairperson Robert Mugabe, President of Zimbabwe, urging the region to wean itself from exporting raw materials and seek to create value chains that lead to the export of finished products.
President Mugabe’s message has been shared by many across the continent who feel that embarking on processing raw materials into finished products is the viable way of realising Africa’s dream of liberating itself economically.
The region has limited or non-existent structures that support value-addition and many countries in sub-Saharan Africa end up exporting raw materials but the amount of positive benefits that can be derived from exporting finished products remains dormant.
Much of the profits from resource exploitation leave the continent, and entirely ends up in the hands of foreign-owned companies.
Few African countries process their own raw materials, majority have their natural resources value-added in overseas countries, much to the benefit of these nations.
It is precisely for this reason that foreign-owned resource extraction companies are often criticised for providing little in terms of local employment and contribution to the growth of local economies.
The continent’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 robust, diversified and sustainable economic growth.
Africa can simply transform her economy by adding value to its raw materials because manufacturing gets the bulk of its resources from these raw materials.
To do this, African countries must improve energy and transport infrastructure as well as investing in modern technology as key enablers to productivity and socio-economic development.
It goes without saying that raw material development, in form of value-addition to the continent’s raw materials, is crucial to ensure maximum benefits and improve people’s living standards.
The gist of this turn-around in trade relies mainly on promoting industries that will ensure the goal of value-addition to resources is attained and help Africa graduate from exporting raw materials.
Africa must have strategic plans at developing raw materials and attracting constant commercialisation of natural resources that would encourage their utilisation as well as rapid development of local industries locally if the continent is to fully benefit from its natural resources.
This is crucial for Africa’s development. Thus, experts, political leaders and all stakeholders in the science and industry sector need to stand together with this mindset, and rise to the challenge of promoting economic transformation through effective development of raw, natural resources.