For centuries, the economies of African countries have been made dependent on advanced economies, and despite the enormous amount of natural resources in Africa, over 500 million citizens continue to live in poverty.
A case in point is the cocoa and chocolate industries. Even though Africa produces 75 per cent of all the cocoa in the world, the continent gets only 2 per cent of the $100 billion revenue from the chocolate industry.
It is not any different with the mining sector either.
Jean Noel Francois, the Acting Director, Department of Trade and Industry at the African Union (AU) Commission said at the second conference of African Ministers responsible for mineral resources and development December 12, 2011 in the Ethiopian capital Addis Ababa, that even though Africa’s mineral resources are fuelling growth and development in many industrialised and emerging economies of the world, Africa still remains poor, under-developed and dependent on donor assistance for national budget support.
He further reiterated the fact that Africa consumes very little of its own mineral resources and exports most of it as raw materials, “with little or no local value addition and beneficiation.”
Dr. Stephen Karingi of the Economic Commission for Africa (ECA) cited figures showing how much the mining companies are making in Africa. “The figures are there for all to see,” he said, “in 2010 alone, net profits for the top 40 mining companies grew by 156 per cent to $110 billion and the net asset base of these companies now exceeds $1 trillion.”
Addressing the opening of the 51st edition of the African Development Bank (AfDB) Annual Meetings in Lusaka, Zambia, Tuesday May 23, 2016, its president, Dr. Akinwumi Adesina, outlined what the Bank intends to do towards the private sector, infrastructural development and industrialization of the continent. He also announced that the Bank has a new Vice Presidency on private sector, infrastructure and industrialization which will drive private sector operations to deepen financial markets, private sector growth, scale up infrastructure investments, and sharply focus on the industrialization of Africa.
“The formula for the wealth of nations is clear: rich nations add value to exports, poor nations export raw materials,” he said.
Citing the cocoa sector as an example, he said while Africa accounts for 75 per cent of the global production of cocoa, the continent reaps only 2 per cent of the $100 billion annual market for chocolate.
“This model can no longer create the desired wealth for Africa. Africa must no longer be stuck at the bottom of the value chains. Africa must now rapidly diversify its export mix and add value to all of its raw materials by developing efficient and competitive value chains. This is especially critical, as Africa only accounts for 1.9 per cent of global value added in manufacturing, and this has not changed for decades. It is now time to industrialize Africa,” he said.
The AfDB, which is one of the financiers of development in Africa, loaned $9 billion to African countries in 2015.
Announcing that it is leading the charge to industrialize Africa, the Bank says it will triple its climate finance on the continent to $5 billion annually till 2020.