Africa’s vast reserves of cobalt, manganese, lithium, copper and rare earth elements are emerging as a crucial lever to narrow a development financing gap estimated at “$1.6 trillion,” especially as traditional aid declines and borrowing costs rise. The text explains that the continent currently captures only about “40% of potential revenues” from these critical minerals, even though sub-Saharan Africa could gain over 10% of projected “$16 trillion” in revenues from copper, nickel, cobalt and lithium over the next 25 years. To change this, the first strategy is to expand local processing and beneficiation so that more value is added within African economies instead of exporting raw ores. Moving up the value chain from extraction to refining and production of battery-grade materials can increase value per tonne by 15–30% at each stage, potentially raising GDP by 12% and creating 2.3 million industrial jobs, if paired with infrastructure, energy and strong regulatory frameworks.
A second strategy focuses on closing the fiscal revenue gap by reforming tax incentives and curbing illicit financial flows. Excessive tax holidays and exemptions, such as those seen in Sierra Leone and Guinea, have eroded public revenues that could fund social and productive investment. Strengthening tax policy, limiting overly generous incentives, and building state capacity to combat profit shifting and transfer pricing in the mining sector would protect hundreds of millions of dollars currently lost each year. The third strategy emphasizes regional integration because no single African country holds the full mix of minerals required for clean-energy value chains. Initiatives like the DRC–Zambia battery and electric vehicle zone illustrate how shared mineral endowments and lower production costs can attract competitive investment. The African Continental Free Trade Area (AfCFTA) can support this by aggregating demand, harmonizing regulations and coordinating infrastructure, turning dispersed deposits into an integrated industrial hub and enabling Africa to fund its own development through better use of its mineral wealth.
Reference
Chukwudi, I. (2026, April 3). 3 ways Africa can maximize the value of its critical minerals and finance its future. World Economic Forum. https://www.weforum.org/stories/2026/04/africa-critical-minerals-energy-transition/