The abundance of minerals and hydrocarbons can be a blessing or a burden for developing economies. Many of them rely excessively on the export of raw materials for their economic survival. Excessive reliance on exporting these resources for revenue generation often makes countries vulnerable to economic instability when production decreases or global prices drop.
Diamonds, Gold, and Copper : Essential Exports for Many Countries
Nearly 90 % of Botswana’s exports are concentrated in the mining sector, making it the most mineral-dependent country in the world. In this sector, diamonds alone account for 80 % of all exports. Thus, Botswana has become the world’s leading producer of rough diamonds. The IMF estimates that 25 % of the country’s GDP, estimated at 20 billion USD, comes from diamond mining.
In Mali (ranked 3rd) and Burkina Faso (ranked 4th), gold is responsible for most of the dependence on mining exports. However, Guinea (ranked 2nd) also exports a significant amount of aluminum ore in addition to gold.
In Zambia (ranked 5th) and the DRC (ranked 6th), where more than 70% of exports come from mining, copper plays a crucial role. However, Zambia also exports a significant amount of gold, and the DRC is a major exporter of cobalt.
Among the top ten countries in the world whose exports are primarily based on mining, seven are African. This type of dependence on raw materials is more common in developing economies (oil-rich countries are an exception to the rule). As the demand for raw materials tends to follow cycles of boom and bust, less wealthy countries are particularly vulnerable to price shocks.
Economies Vulnerable to External Shocks
Of the 54 African countries, 42 are classified as natural resource-dependent. Among them, 18 depend on non-oil minerals, 10 on energy or fuel exports, and the rest on agricultural exports. Mineral resources significantly contribute to these economies’ fiscal revenues.
This strong dependence on mining rents has made these economies vulnerable to external shocks, often leading to economic disruptions and developmental delays. The AfDB report also highlights that although Africa is endowed with abundant natural resources, this wealth has not systematically translated into sustainable economic growth.
Leveraging Africa’s Mineral Wealth
Africa’s mineral wealth is undeniable. From the cobalt mines of the Democratic Republic of Congo to the manganese fields of South Africa, the continent is rich in minerals essential to the global transition to low-carbon energy and technological progress.
The continent is a focal point due to its vast reserves of minerals essential to renewable energy technologies like solar panels and electric vehicles: 55% of cobalt, 47.65 % of manganese, and 5.9 % of copper, among others.
As the climate crisis intensifies, global demand for these minerals essential to the energy transition could nearly quadruple by 2030. This growing demand offers Africa a unique opportunity to better exploit them to generate more revenue and chart a new path toward prosperity, inclusive growth, and sustainable development.
Africa today has a historic opportunity to trigger a wave of structural transformation in some of the countries that need it most. But leveraging this potential is not just about geological fortune. Historically, the continent has not fully seized the opportunities offered by its natural wealth.
Estimates show that African countries generate only about 40% of the revenues they could potentially derive from these resources due to limited value addition, governance issues, and infrastructure problems, among other constraints.
Governance Reforms Are Essential
Reforms to improve tax administration, ensure good governance of extractive sectors, and promote responsible mining practices should be essential priorities. This will ensure that mining contributes to long-term sustainable development goals rather than hindering them.
Promoting transparency and accountability in mineral resource management, eradicating corruption, and combating illicit financial flows are also essential measures. Without this, it will not be possible to ensure that mining benefits are equitably shared among all citizens.
The continent should also use its vast resources in essential minerals to chart its own green energy transition trajectory, based on its industrialization goals. While asserting itself as a central player in global climate action. A green energy transition is imperative for Africa, a region that accounts for 80 % of the 733 million people worldwide without access to electricity.
