Key points
- AfDB has urged African countries to prioritise value addition instead of exporting raw materials.
- The bank says infrastructure should support industrialisation and regional trade.
- Africa needs stronger local content policies and greater regional collaboration.
- Processing minerals locally could lower costs, create jobs and boost technology transfer.
- The continent’s vast renewable energy resources remain underutilised.
Main story
The African Development Bank (AfDB) has called on African countries to move away from exporting raw resources and focus on value addition as a pathway to sustainable economic growth and industrialisation.
Speaking at the close of the fifth African Natural Resources and Energy Summit (AFNIS) in Abuja, the bank’s Vice President and Chief Economist, Prof. Kevin Urama, said Africa must create greater value from its abundant natural resources if it hopes to achieve meaningful economic transformation. Urama argued that infrastructure investments should be designed to support industrialisation and regional markets rather than facilitate the extraction and export of raw materials.
According to him, many of Africa’s transport corridors still reflect colonial-era economic structures that prioritised resource extraction over domestic industrial development. He also stressed the need for stronger intra-African connectivity, noting that expensive and difficult travel between African countries continues to limit trade, investment and cooperation across the continent. Urama said Africa’s vast renewable energy resources, including solar, hydro, oil and gas, offer significant opportunities for industrial growth if countries work together more effectively.
He pointed to opportunities such as the Inga Dam project in the Democratic Republic of the Congo and the Sahara’s solar energy potential, saying such projects could help reshape Africa’s industrial future through regional cooperation. The AfDB official also advocated stronger local content policies and greater African participation in the ownership and management of natural resource assets. He said African governments should prioritise regional businesses in procurement and licensing processes while requiring investors to undertake more processing and value addition within the continent.
According to Urama, AfDB research shows that processing critical minerals in Africa could significantly reduce production costs while creating jobs and encouraging technology transfer.
The issues
Many African economies remain heavily dependent on exporting raw commodities while importing finished products, limiting the continent’s ability to capture the full value of its natural resources.
Despite possessing large reserves of minerals, oil, gas and renewable energy resources, Africa continues to face challenges related to industrialisation, infrastructure gaps and limited regional integration.
There are also concerns that weak local content policies and inadequate value addition have restricted the economic benefits derived from resource extraction.
Stakeholders increasingly argue that building regional value chains could help Africa create jobs, strengthen manufacturing and improve competitiveness.
What’s being said
“We need to link up corridors that connect markets within Africa instead of building infrastructure mainly for extraction.” — Prof. Kevin Urama, Vice President and Chief Economist, AfDB
“Countries cannot achieve this alone. We need one Africa, one resource, working together.” — Prof. Kevin Urama, Vice President and Chief Economist, AfDB
“Local content policy is not new. These countries deployed it to move from developing economies to advanced nations.” — Prof. Kevin Urama, Vice President and Chief Economist, AfDB
What’s next
African governments, development institutions and industry stakeholders are expected to continue discussions on strengthening regional value chains, expanding local processing capacity and improving infrastructure that supports industrialisation.
The focus is likely to remain on policies that encourage local content, regional integration and greater value addition across Africa’s natural resource sectors.
Bottom line
AfDB says Africa’s long-term economic transformation depends on moving beyond raw material exports and building industries that process, add value to and commercialise the continent’s abundant natural resources.
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