AfCFTA policy consensus on beneficiation: needed pathway to mandatory industrialization of Africa – ‘Make in Africa,’ say participants at Lamprace webinar

The challenge posed by Patrice Lumumba to severe Africa from the role of an economic colony of Europe, so as to be truly independent, cannot be sustained without an audacious Continental Affirmation in Beneficiation Economics. While the theory sounds straightforward, the implementation is likely to be fraught with dangers: Europe and America are likely to rise against Africa in arms. It called on the AfCFTA leadership to champion beneficiation economics, because if Africa must regulate its affairs and future, beneficiation economics must factor in “as sure as death.”

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Beneficiation is the natural pathway for industrialization of Africa, obviating the traditional practice of simply seeking rent from her abundant mineral resources, or having to export raw or crude minerals.

This was the consensus arrived at during a webinar, with the theme: “Make in Africa,” organized by Lamprace, to lend thrust to the Africa Continental Free Trade Areas policy regime. Participation in the Webinar was drawn from over seven countries in the continent, including Nigeria, South Africa, Egypt, Ghana and Ivory Coast.

Generally, beneficiation is any process that improves or benefits the economic value of the mineral ore by removing gangue minerals, resulting in higher grade product (concentrate) and a waste stream (tailings). The process enables the treatment of raw materials to improve their physical and chemical properties in preparation for further processing.

Africa can get more from its minerals by building industries to service mines, asserts Vuyo Mjimba, a chief research specialist at Human Sciences Research Council. Vuyo Mjimba has done World Bank sponsored research for the Oxford Policy Management from the United Kingdom. He has also researched under the Exxaro Chair at the University of South Africa

Multinational firms from Europe, North America and more recently China still dominate the extraction and refining of most of minerals mined in Africa with minimal roles for African firms. From these minerals, foreign manufacturing firms produce consumer and industrial goods for sale in global markets at much higher prices than what’s paid for the raw materials. This is a source of lots of angst among policymakers and economists who are calling for increased local participation in the mining industry.

A critical hurdle to Africa developing a strong industrial base – a prerequisite for any beneficiation – is the dominance of China

A critical hurdle to Africa developing a strong industrial base – a prerequisite for any beneficiation – is the dominance of China and other Asian countries in the labour intensive manufacturing sector. So why can’t African countries simply emulate China?

A number of factors aided China in its industrialization drive. Firstly, China is one country with a huge unified market that can produce and consume its own manufacturing output in addition to exporting the same goods.

Africa, for its part, is a continent made up of many countries. Its market is fragmented which limits inter-and-intra country production. The operationalization of the Africa Continental Free Trade Area Agreement is anticipated to have salutary effect in the market structure of Africa.

Also, China has invested heavily in human capital as well as hard infrastructure, such as bridges and roads. All these factors are critical for any major industrialization drive – and beneficiation – but are lacking in the majority of African countries.

The argument for beneficiation is quite logical. But reversing the incapacitation of post-colonial African states to industrialize, by the Imperialist West, and accessing the rewards of this approach isn’t that simple.

There is still the complexity of industry and markets of beneficiated products and the rules and regulations of supply chains. Most products, components and operations of the beneficiation industry and markets are currently alien to many African economies.

Take the case of steel. To use steel to manufacture washing machines for global markets, a country would need to either establish its own brands and outcompete established ones, such as Samsung, Defy and Hisense, or, alternatively, supply these popular producers with components. In Africa, this is unlikely to happen immediately because of small markets and brand loyalty among other challenges.

Port Harcourt Refinery, Eleme: AfCFTA framework of “Make in Africa’’  – from the blanket award of mining licenses and leases towards a mandatory-threshold for in-country beneficiation, as condition requisite for securing mining licenses across the continent

Nevertheless, the AfCFTA leadership can promote an innovative approach to commodity-led industrialization in a systematic manner. This would run against the mill of the current approaches that take for granted the old taxonomy that frames Africa’s minerals as raw materials for strategic industries in western and eastern countries.

This is in contrast to the long held business approach by African countries which emphasize mining first and foremost as rent seeking rather than opportunity to underpin broad-based structural transformation through developing inter-sectoral linkages for greater value retention within their economies.

The challenge posed by Patrice Lumumba to severe Africa from the role of an economic colony of Europe, so as to be truly independent, cannot be sustained without an audacious Continental Affirmation in Beneficiation Economics. While the theory sounds straightforward, the implementation is likely to be fraught with dangers: Europe and America are likely to rise against Africa in arms.

The Lamprace Webinar concluded on the note that Africa’s political leadership should seek fulfilment in changing policy narratives – under a unified AfCFTA framework of “Make in Africa’’  – from the blanket award of mining licenses and leases towards a mandatory-threshold for in-country beneficiation, as condition requisite for securing mining licenses across the continent.

It called on the AfCFTA leadership to champion beneficiation economics, because if Africa must regulate its affairs and future, beneficiation economics must factor in “as sure as death.”

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