The UN Economic Commission for Africa (ECA) has, at the forty-sixth Ordinary Summit of the Southern African Development Community (SADC), urged SADC member States to accelerate their industrialisation through the processing of their agricultural and mineral resources and the development of regional value chains. This appeal was issued by ECA executive secretary Claver Gatete, in an address to the summit, in Durban, South Africa. He assured his audience that the ECA was committed to working with the SADC, the African Development Bank (AfDB), and all other partners, in order to help achieve this.

“Africa exports minerals; others manufacture batteries, electric vehicles and renewable-energy technologies,” he highlighted. “Africa exports agricultural commodities; others process, package and market higher-value food products.”

Africa as a whole contains some 30% of the world’s reserves of critical energy transition minerals (demand for which could triple by 2030). Southern Africa, in particular, had rich deposits of platinum-group metals, cobalt, copper, lithium, manganese and diamonds. It has fertile land and already possesses manufacturing capacity and financial markets. And intraregional transport corridors, which link the Atlantic and Indian Oceans, already exist. 

Yet the minerals sector accounts for only 7% of direct employment in the SADC. This shows the opportunity that exists.

Research by the ECA has shown that the construction of a 10 000 t battery precursor plant in the Democratic Republic of Congo (DRC) would cost some $39-million, or about 33% of the cost of an equivalent plant in the US. Such a DRC plant would also cut carbon emissions compared with the current supply chains that run via China.

PRIORITIES OUTLINED

The ECA had identified six priorities for the SADC to industrialise.

First, mobilise partnerships and financing “at scale”. Governments have to lead but cannot finance this programme on their own. Bankable regional energy, industrial park, transport, and agro-industrial projects have to be jointly developed with development finance institutions, sovereign wealth funds, the private sector, and pension funds.

Second, mineral beneficiation and regional critical mineral value chain development has to be accelerated. The aim has to be the creation of integrated regional industrial value chains running all the way from minerals extraction to the manufacture of finished products.

Third, agriculture has to be turned into an engine for industrialisation. This requires investment in seed systems, irrigation, mechanisation, storage, food processing, cold chains and export infrastructure. It will also increase employment, food security and climate resilience.

Fourth, agricultural input and fertiliser security has to be made a strategic regional priority. The region has the resources (natural gas, phosphate reserves and markets) to develop its own fertiliser value chains, which will both cut costs for local farmers and stimulate industrialisation.

Fifth, reinforce the regional value chains by means of the African Continental Free Trade Area, which will reduce trade barriers and so make cross-border investment easier.

And sixth, rapidly increase investment in energy and its enabling infrastructure, as reliable, affordable and sustainable energy is essential for industrialisation, modern digital connectivity and efficient transport systems.

The ECA and AfDB are partnering in the development of African Critical Mineral Value Chains and their related strategic corridors. Within the SADC, these are:

• the Battery and Electric Value Chain, which embraces the DRC, Zambia, Tanzania and South Africa;
• the Lithium Industrialisation Corridor embarcing Zimbabwe, Namibia, Botswana and South Africa; and
• the Graphite Processing Corridor consisting in Mozambique, Madagascar, and Tanzania

Further, the Iron Ore, Manganese and Green Industrial Materials Corridor embraces South Africa, Zimbabwe and Namibia as well as the West African States of Guinea, Mauritania, Liberia and Gabon.

“Southern Africa has the minerals, agriculture, energy, finance, ports, skills and markets to build competitive regional production networks,” pointed out Gatete. “The pathway is clear: implementation at scale, coordinated regional action and sustained investment.”