Africa has about 12% of the world’s oil reserves, 42% of its gold, 80%-90% of chromium and platinum group metals and 60% of arable land in addition to vast timber resources. Despite these immense resources, Africa still hasn’t experienced sustainable economic growth and advancements.
Richard Auty’s (1993) work highlights some of the reasons behind this phenomenon. Auty argues that natural resource wealth can lead to a “rentier state” mentality, where governments rely on resource revenues to finance public spending and neglect other economic sectors. This can lead to a lack of diversification and resilience, making African economies vulnerable to external shocks such as commodity price fluctuations.
The African Union recognised the challenges faced by African countries and has already taken steps to address them.
The Agenda 2063 is the African Union’s vision for Africa’s development over the next 50 years. The agenda aims to promote economic growth and development, eradicate poverty and achieve sustainable development. To achieve these goals, the African Union has developed various strategies and initiatives, including the African Commodities Strategy (ACS).
The African Commodities Strategy is a framework developed by the African Union to promote sustainable economic development in Africa. It aims to increase the value and competitiveness of African commodities in global markets, based on the belief that Africa has the potential to become a major player in the global commodities market. To achieve this potential, targeted interventions are needed to address the unique challenges facing African commodity producers.
The strategy’s development is key to enabling African countries to add value to their commodities, extract higher rents, integrate into global value chains, and promote diversification anchored in value addition and local content development.
The first pillar, value addition and beneficiation, aims to increase the value of African commodities by promoting the processing and manufacturing of raw materials within Africa. This can help to create more jobs and add value to the products, which in turn can lead to higher profits for African commodity producers.
The second pillar, infrastructure development, aims to improve infrastructure such as transportation, energy, and telecommunications to facilitate the movement of commodities across the continent and to global markets. The lack of infrastructure in many parts of Africa has been a major hindrance to the development of the commodities sector, and addressing this issue is critical for the success of the strategy.
The third pillar, financing and investment, aims to increase access to financing and investment for commodity producers, particularly small and medium-sized enterprises. This can help to provide the necessary capital for producers to invest in their businesses, expand their operations, and take advantage of new market opportunities.
The fourth pillar, trade and market access, aims to increase market access for African commodities through trade agreements, market diversification, and reducing barriers to trade. This can help to ensure that African producers have access to global markets, which can help to increase demand for their products and ultimately increase their profitability.
The fifth and final pillar, capacity development, aims to build the skills and knowledge of African commodity producers and institutions to improve productivity, efficiency, and competitiveness. This can help to ensure that African producers are able to compete effectively in global markets and take advantage of new opportunities as they arise.
By transforming Africa from a raw materials supplier for the rest of the world into a continent that actively uses its own resources for economic development, the strategy aims to help achieve the goals of Agenda 2063 – to transform Africa into a prosperous, integrated, and peaceful continent by 2063. Overall, the African Commodities Strategy is seen as a crucial tool for promoting sustainable economic growth, job creation, and poverty eradication in Africa.
Plenty of work needs to be done in both small and large-scale mining operations to achieve sustainability, improve productivity and enhance value addition. Through this, we will assuredly increase our competitiveness in the global commodity market courtesy of our growing number of value addition facilities as well as the steady formalization of the sector. The continent must work collaboratively to implement all five pillars of the strategy if we are to transform Africa’s raw materials into a dynamic and resilient catalyst for growth that benefits every African