Sub-Saharan Africa urged to maximize revenues from critical minerals boom — IMF
The sub-Saharan African region that holds about 30% of the world’s proven critical mineral reserves can be transformed if it can take the opportunity to develop critical minerals markets and processing industries to maximize the potential of the coming boom, the IMF’s latest Regional Economic Outlook says.
The global transition to clean energy is set to further heighten demand for critical minerals, with demand for nickel projected to double, cobalt triple and lithium rise tenfold over the next three decades, according to the International Energy Agency. If sub-Saharan countries can manage this transition properly, the region could be transformed, the analysis says. With growing demand, proceeds from critical minerals are poised to rise significantly over the next two decades. Sub-Saharan Africa stands to reap over 10% of cumulated revenues totaling an estimated $16 trillion over the next 25 years from the extraction of just four key minerals — copper, nickel, cobalt, and lithium. These revenues could correspond to an increase in the region’s GDP by at least 12% by 2050.
To maximize the potential of the coming critical minerals boom, the region should not only focus on exporting raw materials but also try to process them. Developing local processing industries could significantly boost value added, create higher-skilled jobs, and increase tax revenues, thereby also supporting poverty reduction and sustainable development. The regional governments should also work together to devise a strategy built on cross-border collaboration and integration that can create a larger, more attractive regional market for much-needed investment. A regional strategy is also essential to fully leverage the diversity of critical minerals—clean energy technology requires combining multiple minerals scattered across the region. Finally, regional countries also need to collaborate in the development of policies to create more supportive investment and business environments.
