By Raine St.Claire
Africa, renowned for its abundant natural resources, is experiencing rapid growth in heavy industries that demand iron, steel, aluminium, zinc, and rare earth metals. This resurgence signals Africa’s potential to emerge as a major global leader in the production of industrial goods.
In 2023, several economic sectors saw remarkable growth, fueled by increased global competition for African resources, as reported by the Economist Intelligence research firm.
Interestingly, many economists predict that Africa and India will emerge as two key industrial players, sparking a competitive race for industrial dominance between China and the US. This competition not only influences the future of industry but also drives significant investments.
Mineral markets
Driven by global demand, energy transition trends, and improved trade networks, the African mineral markets experienced remarkable growth in 2023. With 30% of the world’s mineral resources, Africa is a preferred destination for clean energy investors and mining companies, leading to a surge in FDI.
Vehicle manufacturing sector
The car business is booming in Africa! Thanks to sustained local demand, regional trade, foreign investment, global integration of value chains, and supportive policies, the automotive industry experienced significant growth in 2023. Major global vehicle manufacturers are setting up production plants in countries like South Africa, Angola, Ethiopia, Ghana, Kenya, Namibia, Nigeria and Rwanda. South Africa, Rwanda, and Morocco offer particularly favourable environments, aligning with international climate policies.
Construction industry
Diverse developments like oil and gas pipelines and transportation infrastructure have resulted in the building market thriving. Projects like the Central African Pipeline System and electrification initiatives will continue to boost economic growth and job creation. Rising investment across sectors like energy, agriculture, transportation, and manufacturing will contribute to the construction market’s substantial growth.
Potential to thrive again: Africa’s unfolding economy
Heavy industry, in particular large-scale, energy-intensive manufacturing processes, is making a comeback and the African continent is witnessing the growth of existing refineries and plants, tapping into its vast mineral and metal resources.
Antonio Pedro, Executive Secretary of the Economic Commission for Africa believes, “Africa’s sustainable economic transformation requires accelerated and sustainable industrialisation,” and that this development could position Africa as a leader in heavy industries on the global stage.
Reviving heavy industry in Africa as a future hub for industrial goods
Driven by global demand, rising prices, foreign investment, and long-term development plans, Africa’s natural and mineral resource sector is set for rapid growth. Key projects like Senegal and Mauritania’s Greater Tortue Ahmeyim facility and Ghana’s Tano Cape Three Points are attracting significant foreign direct investment (FDI). Licensing rounds in Kenya, Angola, Equatorial Guinea, Uganda, and the Democratic Republic of the Congo (DRC) are opening up new opportunities. Namibia’s hydrocarbon discoveries are expected to double GDP by 2040, and the African Continental Free Trade Agreement will boost intra-African trade.
China’s role
China, through infrastructure projects and industrial support initiatives, is aiding Africa’s industrial sector growth. At the 15th BRICS summit, China committed to increased support, outlined in the China-Africa Cooperation Vision 2035. This vision includes a $60-billion investment by 2035, focusing on agriculture, manufacturing, infrastructure, environmental protection, and more.
U.S. recognition of Africa’s crucial position in global affairs
The United States has consistently acknowledged Africa’s significant importance and potential within the dynamic geopolitical landscape. US Secretary of State Antony Blinken emphasised this, stating that “Africa will shape the future, not only for its people but for the entire world.”
Recognising the challenges posed by climate change and the unsustainable dependence on oil exports under AGOA (African Growth and Opportunity Act), it is essential to undergo a strategic shift that emphasises the significance of a Just Energy Transition as a crucial component in complementary programmes under AGOA. The adoption of e-mobility presents an opportunity for transformation. Diverse value chains, including agri-business, pharmaceuticals, vaccines, transport, logistics, textiles, and apparel, supported by digitalisation and financial services, showcase the potential for green industrialisation and inclusive wealth creation.
Iron and steel: Catalysts for Africa’s industrial progress
At the heart of the African continent’s heavy industry resurgence is the iron and steel sector. Despite having some of the world’s most underutilised iron ore resources, Africa produces only a fraction of its potential output. The sector holds immense growth potential, with major companies like ArcelorMittal and Fortescue investing heavily in West Africa to boost iron ore production. These investments could significantly contribute to regional economic development and the global iron and steel market.
Metallic elements shaping industrial development
Aluminium and zinc are crucial players in Africa’s industrial revival. Ghana, Guinea, and Mozambique have rich bauxite deposits, a key source of aluminium. Meanwhile, Namibia and South Africa hold significant zinc resources. Zinc, in particular, shows substantial growth potential in Africa, with companies like Vedanta Zinc International taking the lead. Their Gamsberg mine in South Africa is considered one of the largest undeveloped zinc deposits in the world.
Rare earth elements: The key to Africa’s potential
Rare earth metals unlock new possibilities for the industry in Africa. According to Invest Africa, countries like the Democratic Republic of Congo, Malawi, and Kenya have the opportunity to lead in rare earth production. South Africa boasts substantial deposits of crucial minerals such as neodymium, praseodymium, and dysprosium. These components, vital for cutting-edge industries like smartphones, electric cars, and renewable energy technologies, present an exciting forecast for the continent, enabling it to play a significant role in the global supply chain of these essential metals.
Paving the way to industrial leadership
Harnessing the rare earth metals in Africa can be a key driver for the continent’s industrial expansion, solidifying its global role in producing industrial goods. However, addressing challenges like socio-economic impact, aligning with sustainable development goals, and overcoming infrastructure and skill gaps necessitates a thoughtful and balanced strategy. With forward-thinking policies, strategic investments, and global collaborations, Africa can transform these challenges into opportunities, fostering sustainable industrial growth.
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