Charles WanguhuAfrica’s resource-rich countries face a simple economic question: where is the value created from their minerals? The continent holds about 30 per cent of the world’s critical mineral reserves but captures less than five per cent of value added in mineral supply chains.
Much of the processing and manufacturing happens elsewhere, with China refining close to 70 per cent of the world’s critical minerals.
The problem is therefore not a lack of minerals, but a lack of industrial capacity.
That capacity starts with energy. Refineries, smelters and manufacturing plants need reliable, affordable power.
Yet sub-Saharan Africa accounts for roughly 85 per cent of the world’s electricity-access deficit. Any beneficiation strategy that ignores reliable baseload power risks remaining an ambition on paper.
The other lesson is sequencing.
Indonesia’s restrictions on raw nickel exports helped create a domestic processing industry, but also exposed vulnerabilities, including dependence on a dominant buyer and capacity built ahead of demand.
The lesson is that export restrictions work best when processing capacity, markets and infrastructure are developed alongside them.
Africa has examples of successful value capture. Botswana moved diamond sorting, valuation and sales to Gaborone, helping develop a local cutting and polishing industry. Morocco processes phosphate into fertiliser rather than exporting the raw mineral.
Other experiences are less complete. Tanzania’s restrictions on mineral concentrates produced a negotiated settlement with foreign miners, but domestic refining remains a work in progress. Zambia’s changing mining rules have also created uncertainty for investors.
The same question now faces Kenya at Lake Magadi.
For more than a century, soda ash has been extracted in Kajiado, with limited downstream manufacturing of products such as container glass and sodium chemicals.
The government now expects future operations to include local processing.
Getting this right will require predictable rules, reliable power and transparent agreements with communities and investors.
Kenya’s geothermal resources provide an opportunity to supply the continuous power required for energy-intensive processing, while solar and newer technologies can complement the system.
Environmental standards will also matter. As major markets introduce carbon-related trade measures, cleaner production is increasingly becoming a condition of competitiveness.
Most importantly, host communities must become partners rather than bystanders.
Kenya’s Mining Act provides for community development agreements and sharing of royalties, but enforcement, local employment and procurement will determine whether communities see tangible benefits.
Magadi is therefore more than a test of one mineral project. It is a test of whether Kenya, and Africa more broadly, can move from exporting resources to building industries around them.
The sequence is clear, that is, secure power, establish predictable rules, build processing capacity and develop regional markets. That is how mineral wealth can become lasting industrial wealth.
The director of the Africa Futures Policy Hub and Enzi Ijayo Africa Initiative spoke to the Star
