Enhancing Value Addition in the Extractive Sector in Africa: Why is it Important and How Can it be Achieved

Africa has a wealth of extractive resources. However, most of its minerals are extracted and exported in their raw state. The processing of its minerals into higher value output and products is done elsewhere. Hence, the majority of Africa’s mineral-rich states are not only earning the minimum amount from their resources through the export of unprocessed ores but also restricting opportunities to diversify their economies, thereby leaving them vulnerable to the fluctuations of global resource markets. In many countries, extractive industries operate as enclaves separated from other economic activities. Inherently capital intensive, they provide few opportunities for host country suppliers, assemblers or manufacturers. Africa’s significant and diverse mineral resources and production, regional markets, and the ingenuity and energy of its population, provide a powerful combination to realize the continent’s growth and development, contribute to industrialization, and foster inter-generational equity. But these outcomes will only be achieved through the realization of all of the mineral linkages outlined in the Africa Mining Vision. And for this to happen, countries will need to think and act regionally, not as islands, to the realize the full benefits from mineral value chains and drive the industrial and human development of the continent.