The International Monetary Fund (IMF) estimates that significant mineral resources in Sub-Saharan Africa (SSA) can improve the region’s GDP by 12% by 2050.
This was revealed in the statement posted on Monday on the IMF’s official website.
According to the lender, the area has a chance to grow vital resource markets and processing sectors in order to take full advantage of the impending development in these sectors.
According to the statement,
- “The global transition to clean energy is set to further heighten demand for critical minerals, from electric vehicles to solar panels to future innovations.”
- “The International Energy Agency projects that between 2022 and 2050, the demand for lithium will increase tenfold, cobalt will triple, and nickel will double.”
- “The most recent Regional Economic Outlook reports state that this transition, if handled correctly, has the potential to transform the region, with sub-Saharan Africa estimated to hold about 30 percent of the volume of proven critical mineral reserves.”
- “Critical mineral production is already centered in Sub-Saharan Africa.”
- “Almost half of the world’s proven reserves and over 70% of the world’s cobalt output are found in the Democratic Republic of the Congo.”
- “South Africa, Gabon, and Ghana together account for more than 60% of global manganese production. Zimbabwe, the Democratic Republic of the Congo, and Mali all have significant lithium reserves that are not yet fully explored. Additional nations possessing noteworthy vital mineral resources are Guinea, Mozambique, South Africa, and Zambia.”
- “Over the next 20 years, revenues from critical minerals are expected to rise significantly due to growing demand.”
- “Over the next 25 years, in 2023 dollars, global revenues from the extraction of just four key minerals—copper, nickel, cobalt, and lithium—are estimated to total $16 trillion.”
- “Over 10% of these total revenues could be received by Sub-Saharan Africa, potentially leading to a 12 percent or greater increase in the region’s GDP by 2050.”
It clarified that if pertinent stakeholders manage the transition effectively, it is doable.
The IMF continued, “These estimates have a high degree of uncertainty—but the general direction is certainly encouraging—given the volatile nature of commodity prices and the uncertainty surrounding the future direction of technological innovation.”
The declaration further said,
- “By processing and exporting raw materials together, the region can reap even bigger benefits.”
- “Raw bauxite, for example, sells for $65 per ton, but when processed into aluminum, it earns a whopping $2,335 per ton by the end of 2023. However, the thousands of trucks that transport raw lithium from Zimbabwe to ports for export to China each day demonstrate how little opportunities there are for local processing of vital minerals.”
- “Sustaining poverty reduction and sustainable development can be aided by the growth of local processing industries, which might greatly enhance value added, create higher-skilled jobs, and improve tax revenues. Countries will be better equipped to defend themselves against exchange rate volatility and demands on their foreign currency reserves by diversifying their economies and rising up the value chain, which will reduce their exposure to unpredictable commodity prices.”
- “While foreign direct investment can contribute to the cash and know-how needed to grow mineral processing companies, local processing investments are less appealing when there isn’t a sizable regional market. This has to be fixed by policymakers.”
