For decades, Africa’s mineral endowment has been presented as the foundation of its future prosperity. But speakers at the Africa Mindset Reset Forum challenged that assumption, arguing that the continent’s greatest opportunity may lie not beneath the ground, but in the human capital, technology and industrial systems it builds around it. Kwame Ofori Appiah takes a closer look.
Africa’s vast mineral wealth is often treated as an unquestionable fact – and as the key to unlocking the continent’s development.
But what if both assumptions deserve greater scrutiny? After a century of exploitation, Africa’s much-vaunted mineral wealth has not yielded what was expected. During the Africa Mindset Reset Forum in Kigali, Ghanaian public policy analyst and founder of mPedigree, Bright Simons and Ugandan journalist Andrew Mwenda challenged some of the most persistent ideas surrounding Africa’s natural resources. They argued that an excessive focus on what lies beneath the ground may be obscuring capabilities that could create far greater economic value.
Simons began by questioning the widely repeated assertion that Africa contains roughly 30% of the world’s mineral resources. This claim, he argued, is “so loosely defined that it is meaningless”, highlighting that, of the 5,000 different mineral species that exist globally, the 30% figure rarely specifies which of the minerals are included.
Examining 38 of the world’s most traded minerals, Simons said he found Africa’s average share to be closer to only 5% – a dramatic difference from the proclaimed 30%.
Africa is exceptionally well endowed in some commodities. South Africa, for instance, holds a lot of platinum-group metals; Morocco, many phosphates – but that does not necessarily translate into a broad industrial advantage.
The crucial question, Simons argued, is not simply which minerals Africa possesses, but rather, which ones matter for the industries it wants to build.
Tanzania dominates the global production of tanzanite; however, its relatively small market makes it a poor foundation for industrialisation, with the government capturing only around $20m annually. By contrast, Brazil, which produces only 16% of global iron ore, earns roughly $30bn a year from it.
“Don’t let somebody use their list of minerals and claim that those minerals are important for you, when your focus is on manufacturing,” he said, warning of the dangers of Africa allowing international demand for a handful of ‘in-vogue’ minerals to dictate its industrial strategy whilst overlooking the bulk commodities required to build infrastructure and manufacturing capacity.
The importance of the value chain
Journalist Andrew Mwenda approached the question of mineral wealth through the lens of global value chains. “The process of development takes place in the context of international trade, and international trade is a value chain,” he said, in which each country occupies a different position.
One country may extract iron ore, another turns it into steel, another manufactures a vehicle, and another captures much of the final value through design, technology and marketing. “How much you earn from international trade depends on your position in that value chain.”
For Africa, then, the issue is not so much what minerals exist. Instead, the fundamental problem is “the absence of two things – human capital and technology”.
These capabilities determine whether a country can convert minerals into higher value products or even import the minerals from elsewhere and use them to manufacture sophisticated goods.
South Korea and Japan, he pointed out as contrasting examples, built some of the world’s most sophisticated industrial economies without large domestic mineral endowments.
“The lie about Africa is that our development will entirely depend on the presence of minerals under our feet.” Africa should look above ground to find its greatest assets.
“Our brightest mine is not in gold, it is in the human capital to generate the technology, to build trade links that can allow us either to exploit the minerals we have, or to exploit minerals from other countries to create the most advanced products,” said Mwenda.
Beyond extraction – and beyond refining
In any case, Africa currently captures only a fraction of the value generated from the minerals it produces.
Mwenda estimated that Africa generates about $500bn a year from minerals, yet governments receive only around $20bn in royalties and taxes. He argued that this gap reflects the extent to which exploration, mining and processing remain controlled by companies outside the continent.
The answer is not simply to mine more. Nor, Simons argued, is it enough to equate “value addition” with refining. “Almost everyone that I often hear talking about value addition thinks of value addition in terms of refining,” he said. But refining itself can be a low-margin activity.
The greater opportunity may lie in the much broader industrial ecosystem surrounding mining: machinery, chemicals, engineering, technology, logistics and other inputs and services.
“Don’t only think of incremental refining,” Simons said. “Think of all the ancillary linkages, think of all the other opportunities around the mineral.” Ghana, for example, has had 120 years of gold production, but still imports relatively simple inputs used by the mining industry.
A genuine “360-degree approach to beneficiation” should therefore ask how much of the wider mining economy African companies can capture – not simply how much raw material can be processed before export.
A strong example of the difference between mining and the economic value generated by mining, Mwenda pointed out, is seen in the United States. America’s non-fuel mineral production may be relatively modest, but those minerals feed into aerospace, electronics and advanced manufacturing, producing vastly greater economic value.
“I think that is what Africa should be discussing,” he said. “How can we convert the little that we have into high value?”
Similarly, the iPhone provides a helpful illustration – with the design and marketing providing “64% of its value”. The greatest value in sophisticated products frequently lies not in the underlying materials but in design, technology, branding, intellectual property and marketing.
“If Africa does not go into the high value end of the product cycle, you can mine minerals, you can process them, you can sell but as long as you’re not at the highest end of the product cycle in terms of value, you can never benefit,” he said.
Mapping Africa’s minerals
There is a further complication: the continent may not have a sufficiently accurate picture of its own mineral endowment. Mwenda described Africa as “the most underexplored continent in the world when it comes to minerals”, arguing that in many countries, geological knowledge still depends heavily on mapping conducted decades ago, “so we are fighting over something we don’t even know”.
Simons noted that Africa’s share of global exploration spending has fallen from around 16% to 10%, even as the demand for minerals needed for industrialisation and the global energy transition grows.
Attaining geological information should, he argues, itself be treated as an economic asset. Rather than tying mineral data exclusively to companies seeking mining rights, governments could create separate rights around geological information, enabling technology firms and researchers to apply tools such as artificial intelligence to exploration.
Building capability before accelerating extraction
Both speakers also challenged the assumption that foreign mining companies are inherently incompatible with African development.
Indeed, Mwenda argued, multinational capital could be a vehicle for transformation, given it is created within the right framework, which ensures local capability, technology transfer and wider economic linkages.
Simons, drawing on comparative experiences with Saudi Arabia and Nigeria, similarly argued that governments should build domestic capabilities alongside – and in some cases before – accelerating extraction.
The underlying message was that minerals do not transform economies by themselves; they require structures connecting them to knowledge, infrastructure, finance, technology, industry and trade.
This leaves Africa with a different development question from the one it has traditionally asked. Instead of asking how much mineral wealth lies beneath its soil, the continent may need to ask how much capability it is building above it.
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Rethinking mineral assumptions
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