The African Development Bank (AfDB) has urged African nations to seize a more strategic role in the global energy transition by moving away from merely exporting raw minerals and focusing on processing and value addition.
Speaking in a statement on Sunday, AfDB President Akinwumi Adesina highlighted Africa’s vital role in supplying essential minerals for clean energy technologies.
“Africa is rich in critical minerals such as cobalt, bauxite, manganese, and vanadium. The Democratic Republic of Congo alone produces 70 percent of the world’s cobalt,” Adesina stated.
He emphasized the importance of African countries learning from successful global models, like Indonesia, China, and Chile, which have strategically positioned themselves within the global value chain by introducing policies that promote local processing of raw materials.
For instance, Indonesia’s ban on raw nickel exports and its push for domestic processing have helped bolster its downstream industries, while China dominates the mineral processing industry by controlling over 80 percent of the world’s refining capacity through coordinated policies and infrastructure investment.
Adesina also pointed out that Nigeria has the potential to become a key player in solar panel production, due to its local mineral resources and relatively low production costs.
However, he stressed that to harness this opportunity, Africa needs a clear industrial policy on critical minerals to drive local manufacturing.
In his remarks, Adesina outlined five priority areas to ensure Africa’s competitiveness in the global energy transition.
These areas include significant investment in energy infrastructure, the development of critical minerals, industrialization linked to clean energy, sound regulatory frameworks, and the protection of governance and community rights.
He further revealed that the AfDB, in partnership with the African Union and the Economic Commission for Africa, is working on an African Green Minerals Strategy to guide the continent’s efforts in these areas.
On the topic of Africa’s rising capital costs, Adesina expressed concern over the persistent “Africa risk premium,” which results in African countries facing capital costs that are three to five times higher than those in other regions.
He called this perception unfair, stressing that while Africa faces risks, they are no greater than those in other parts of the world.
“Misperception drives up capital costs and limits development financing,” he said.
Citing a report from the UNDP, Adesina highlighted that correcting this misperception could save the continent an estimated $75 billion annually in debt financing.
In response to these challenges, the African Union has approved the creation of the African Credit Rating Agency, which will provide objective credit risk assessments tailored to Africa’s unique economic conditions.
Furthermore, Adesina announced the inauguration of the Africa Financing Stability Mechanism, developed by the AfDB at the request of the African Union.
This mechanism aims to provide financial safety nets for African countries, and once fully operational, it will help refinance at least $10 billion annually in debt service payments over the next decade.
Adesina reaffirmed the AfDB’s commitment to supporting Africa’s development through initiatives that promote industrialization, fair investment opportunities, and financial stability.
