Don’t you all think it is so bazaar how Africa not only possess the most diverse cultures, religions, wildlife, and landscape, but also abundant human and natural resources? I think it is unbelievable, for the good of course. Never before has the world been so aware of the ENORMOUS resources found across all of Africa. Africa for the first time in a long time has the opportunity to promote industrialisation and economic reform by implementing strategies aimed at adding long-term value to all sectors such as agriculture, industry and services.
Africa is endowed with plentiful diverse natural resources, as well as land and fertile soils, oil and minerals. Africa has about 12% of the world’s oil reserves, 42% of its gold, roughly 85% of chromium and platinum group metals, and 60% of arable land in addition to vast timber resources. With such abundance and rising global demand for raw materials, African governments are building new partnerships, enhancing infrastructure investment and sharing abilities and technology.
Primary commodity production and exports involve enormous relinquished income through lack of value addition, the export of jobs to countries that can add value, and exposure to high risks due to dependence on exhaustible commodities and fluctuations in commodity demand and prices. Instead of relying on exports of raw materials, the continent should add value to its commodities to promote sustained growth, jobs and economic transformation. While African commodity-exporting economies have intensely gained from recent sustained increases in the price of their primary commodity exports and an increase in resource rents, these rents cannot be relied on as an engine of growth and development. Fluctuations will certainly occur, and then what? This is not only because commodities are exhaustible but also because adding value would help African countries to diminish contact to the risk of commodity price fluctuation.
On top of proposing short- to medium-term comparative advantages, with the right industrial policies, commodity-based industrialisation can act as a platform for long-term diversification and competitiveness in new and non- commodity sectors in Africa’s commodity-rich countries.