The recent Roundtable with African Ambassadors on Critical Raw Materials held at King’s College London made evident That Africa’s current position in the global political economy is not significantly different from the one during the colonial era. The event featured the ambassadors of South Africa, Zambia, and Namibia, along with academics from the King’s African Leadership Centre and the Department of European and International Studies. The discussions at the conference echoed the arguments of Richard Auty, who first operationalised the term ‘resource curse’ to highlight the long-term economic underperformance of resource-endowed countries despite their mineral wealth. How can Africa effectively capitalise on its resource endowment? Explores Ishan Jasuja. (Photo credit: Cheriesse Bema Kwakye)
Africa’s resource richness has attracted the interest of foreign capital since the colonial era. Ever since the first scramble for Africa in the late 1800s, global powers have sought to establish a foothold in the continent, forming extractive economic relations with its resource endowed countries. The recent Roundtable with African Ambassadors on Critical Raw Materials held at King’s College London made evident That Africa’s current position in the global political economy is not significantly different from the one during the colonial era. While Africa’s major trading partner may now be China instead of a former imperial power, and the resources extracted have shifted from agricultural products to critical minerals or rare earth metals, the nature of the economic relationship has not changed much. African countries continue to suffer from limited bargaining power, low value addition, and sparse industrialization.
The roundtable featured the ambassadors of South Africa, Zambia, and Namibia, along with academics from the King’s African Leadership Centre and the Department of European and International Studies. The discussions at the conference echoed the arguments of Richard Auty, who first operationalised the term ‘resource curse’ to highlight the long-term economic underperformance of resource-endowed countries despite their mineral wealth. Predominantly, the presence of raw materials precipitates short-term rent-seeking and low-value-added export policies at the expense of deliberate long-term development plans. Moreover, debating the question, “who defines the criticality of minerals”, the panelists argued that it is often the interests of Western advanced economies that supersede the agency of African economies. The military-industrial complex securitizes rare earth metals, empowering the exploitation of raw material exporting countries in the name of national security. Hence, the international community must create a collective vision and move away from Western nation-centric discourse in this sector, considering the effects of defining criticality on the socio-economic development of Africa.
The mining sector in Namibia, for instance, makes up for 66% of its total exports and 9.3% of its GDP. This makes the country vulnerable to an over reliance on raw material exports and changes in commodity prices. Further, it possesses some of Africa’s largest lithium deposits, a commodity in high demand due to its use in battery manufacturing. However, its prices have fluctuated significantly over the past few years, reaching a record high of $81,360 per tonne in November 2022 and dropping to $20,782 per tonne in May 2024. Further, raw material exports rarely translate into significant benefits for local communities due to limited job creation, transfer of technology, or skill building. Furthermore, the ambassadors highlighted the widespread environmental degradation caused by resource extraction in their respective countries, particularly when foreign mining corporations exploit loopholes in ESG policies.
These concerns have increasingly encouraged African economies to introduce export controls, limiting vulnerabilities induced by resource-extractive economic relations. Namibia, for example, announced a ban on the export of unprocessed lithium and other rare earth minerals on June 8, 2023. Such policies aim to encourage mineral importers such as China to establish processing and refining facilities in source countries, boosting value addition. Indonesia’s mineral export regulations were brought up as a potential blueprint for Africa’s export controls by one of the panelists at the roundtable. Indonesia is home to the world’s largest nickel reserves amounting to 55 metric tons, and has prohibited the export of nickel ore since 2019 in favor of a domestic processing requirement.
However as I highlighted in my question to the panelists, while such policies may support value addition in African economies, they leave a lot on the table in terms of self-sufficiency. Moving beyond resource extractive economic models and raw mineral exports is certainly a shared goal among African policymakers, but focusing on what leaves the country will only do so much to solve the fundamental challenge. Instead, there is a parallel need to focus on what enters the country though import restrictions, especially on finished goods. Import substituted industrialization, as done in today’s major economies such as Japan and South Korea can serve as a template for long-term economic growth in Africa. Moreover, it will help limit the two-dimensional exploitation of raw material exporting countries where they sell low-value goods but are forced to import high-value finished products due to their expanding consumer markets.
While individual African economies may not hold the leverage to impose tariffs on all forms of imports akin to the current American administration, they can certainly do more to incentivize local production by encouraging the import of machinery and equipment. Aside from catalyzing industrialization and employment generation, such policies will empower predominantly raw material exporting countries to stabilize their balances of trade and payments. The broad agreement among the panelists at the roundtable suggests that common ground can be found to mitigate major economic risks in today’s especially volatile geopolitical climate. Trade instruments and regional institutions such as the The African Continental Free Trade Area (AfCFTA) and African Union can serve as important forums to boost cooperation between African economies and combine the power of their growing individual consumer markets to bolster their bargaining power. However, there is also a need to strengthen domestic institutions and promote good governance to limit corruption and exploitation from foreign companies operating in the African mining sector. In conclusion, a renewed focus on national capacity building and regional cooperation will prove to be a vital step towards breaking Africa’s resource curse.
