Navigating Opportunities
in Africa's Resources

Crystal Orderson looks at the potential wealth generation of resources on the continent and highlights the critical role they play in Africa’s economies, as well as the challenges faced in managing and leveraging these resources effectively to ensure sustainable economic growth.

Challenges and Opportunities:

There are some challenges that emerged due to various administrative issues, leading to an increased need for countries to resort to additional borrowing to cope with economic pressures.

However, despite these challenges, there are still considerable opportunities in the sector. For instance, gold remains a safe haven for investors, particularly in today's risky geopolitical environment. The ongoing geopolitical turbulence has led to a demand for safe commodities, making Africa a crucial player in the global mineral market.

Risk-averse investors are increasingly directing capital towards Africa, recognising the continent's potential. While there has been setbacks in the past, there is a growing realisation among African countries of the value of their mineral resources. By addressing past issues and leveraging their natural wealth, these countries have the opportunity to elevate their economies and become a real force on the global market.

Copper mining in the DRC

63% of the world's cobalt production comes from the DRC. This positions the DRC as a significant player in the global market for metals essential for the production of electric vehicle (EV) batteries. Given this strategic importance, there is a growing realisation that these resources must be managed properly to maximise benefits for the country. International agencies and NGOs are actively working to help the DRC navigate its challenges, ensuring that these resources contribute positively to the nation's development.

Liberia, turning a new page

Liberia, a country with a tumultuous history regarding its natural resources, is beginning to recover, with mining playing a crucial role in this process. Despite its small population, Liberia is rich in minerals, particularly gold. However, in the past, managing these resources led to significant economic and social challenges. Liberia has over a thousand mining operations, ranging from artisanal and small-scale to medium-sized businesses, but despite this, much of the country’s mineral wealth remains unexplored. Now, there is an effort to turn a new page with the opening of the New Liberty Mine, located about 100 km northwest of the capital Monrovia. The investment in this mine has also spurred infrastructure development in the surrounding areas - including the construction of processing plants, housing and the upgrade of transport infrastructure.

These developments show how mining operations can positively impact local communities beyond mere resource extraction, providing critical infrastructure and supporting overall regional development.

Ghana’s “Black Gold”

Ghana is renowned not only for its gold but also for its cocoa production, often referred to as "Black Gold." As the world's second-largest producer of cocoa, Ghana, along with Ivory Coast, dominates the global market, accounting for over 60% of the world's cocoa supply.

The cocoa subsector is the largest contributor to Ghana's GDP and a major driver of its economy. This cash crop has significantly empowered the economy, benefiting not only the government but also smaller communities that rely heavily on cocoa farming for their livelihoods. The revenue generated from cocoa production has facilitated various developmental projects, improved living standards, and provided employment opportunities in rural areas.

Through initiatives aimed at improving agricultural practices and providing fair compensation to farmers, the cocoa industry in Ghana continues to thrive, driving economic growth and contributing to the overall prosperity of the nation.

In conclusion

Resources on the continent create game-changing opportunities for African countries to transform their economies and become significant players on the global stage.

There have been valuable lessons learned on how to manage the "resource curse”. African nations are increasingly aware of these pitfalls and are taking proactive measures to avoid them.

Banks and other financial institutions play a crucial role in supporting these countries. They provide guidance and financial support, helping nations navigate the geopolitical turbulence and economic challenges they face. This collaboration is crucial for ensuring that the wealth generated from natural resources leads to sustainable development and long-term prosperity in Africa.