Africa risks missing a major investment opportunity if governments continue exporting raw minerals, fail to expand electricity supply and negotiate deals that deliver limited benefits to local communities, a leading economist has warned.
Frank Blackmore, lead economist at KPMG South Africa, said the global shift towards renewable energy, electric vehicles and artificial intelligence was creating new demand for Africa's natural resources and energy potential.
The economist cautioned that the opportunity would not automatically translate into economic development.
He pointed out that African countries must coordinate their investment policies, expand energy infrastructure and develop the capacity to process minerals locally if they want to retain more value from their resources.
In an interview with The Star, Blackmore said the continent's ability to benefit would depend on how governments respond to changes in global investment, trade and technology.
He identified the energy transition and the expansion of artificial intelligence as two major developments creating opportunities for African economies.
The demand for minerals used in clean energy technologies is growing, while investment in artificial intelligence is increasing the need for electricity, data centres and digital infrastructure.
For Kenya, the challenge is to position itself to attract investment while ensuring that the resulting economic activity supports local industries, creates employment and builds skills.
Blackmore's assessment comes amid a broader push across Africa to move beyond exporting raw materials and develop industries around the continent's mineral resources.
The African Development Bank has also called for greater local processing, regional value chains and industrialisation to generate jobs and economic transformation.
Critical minerals offer Africa a new opportunity
Blackmore said the global energy transition had increased demand for critical minerals used in renewable energy technologies and electric vehicles.
Africa, he argued, was well placed to respond because of its mineral resources.
"The global energy transition and the rise of alternative energy, as well as things like electric vehicles, et cetera, have meant that demand for critical minerals has increased many folds and continues to increase," he said.
"I think we're still on the ascendant in terms of that demand," he added.
He said Africa's experience with other minerals, including gold, platinum and diamonds, demonstrated the continent's resource potential.
The growing demand for minerals used in emerging technologies could create an opportunity for African countries to support their own development while supplying materials required by the rest of the world.
However, the opportunity extends beyond extracting and exporting minerals.
Blackmore said African economies needed to consider how they could participate in more stages of the production process and retain a greater share of the economic benefits.
That would require investment in electricity, transport, processing facilities and other infrastructure needed to support industrial activity.
For countries like Kenya, the question is not simply whether they can attract investors interested in minerals.
It is whether these countries can develop the infrastructure and industrial capacity needed to turn resource extraction into wider economic gains.
Why Africa needs to process its minerals locally
Blackmore said mineral processing was essential if African countries wanted to retain more value from their natural resources.
He noted that governments across the continent had expressed a desire to stop exporting raw minerals without developing domestic processing capacity.
"Well, by processing the critical minerals as well, you keep a lot more of the value added on the continent," he said.
However, he warned that processing minerals required substantial amounts of energy. Countries without sufficient and reliable electricity would struggle to establish competitive processing industries.
He said governments should therefore approach industrialisation in stages, starting with the infrastructure needed to support processing.
"If you don't have the energy capacity in order to beneficiate minerals yourself, that should be put in a strategic industrialisation process within your economy," he said.
He proposed that governments first determine how to increase electricity supply. They should then identify which minerals could be processed with the available energy before gradually expanding into more demanding industrial activities.
"Step one, how do we increase energy on the grid so that we have the availability to be able to beneficiate these minerals?" he said.
"Step 2, which minerals require the least amount of energy so that we can begin producing those first?"
Blackmore said the approach would allow countries to build processing capacity progressively rather than attempting to establish industries without the necessary infrastructure.
He also highlighted the importance of transport networks, including railways and ports, in moving minerals and processed products to markets.
While renewable energy could shorten the time needed to develop electricity capacity in some circumstances, he said other infrastructure investments would still require planning and time.
"I would suggest that energy is the main priority throughout most of Africa at this point," he said.
He added that reliable electricity was important not only for industrialisation but also for expanding access to power among ordinary citizens.
AI investment could create an energy opportunity
Blackmore said artificial intelligence was creating another potential investment opportunity for Africa, particularly through data centres and the electricity needed to operate them.
Much of the current investment in AI technologies is taking place in developed economies. However, the infrastructure supporting these technologies could create opportunities elsewhere.
Data centres require substantial amounts of electricity, making energy availability an important consideration for companies deciding where to establish them.
Blackmore said Africa could use its solar, wind and hydropower resources to attract investment in digital infrastructure.
"Artificial intelligence has become an energy play as well," he said.
He explained that data centres required large amounts of power and that sustainable electricity would be preferable where it could be reliably supplied.
Africa's opportunity, therefore, was not necessarily to compete immediately with developed countries in developing the most advanced AI systems.
Instead, countries could position themselves to supply the energy and infrastructure needed to support the technology.
"Our AI play is this energy play," he said, arguing that Africa could attract data centres by developing the electricity capacity needed to operate them.
The opportunity could also reinforce demand for critical minerals because digital infrastructure requires materials used in its equipment and supporting technologies.
Blackmore said the continent could pursue foreign investment in data centres while also developing its own capacity.
"I think it's going to be a bit of both," he said.
Foreign investors could bring capital, technology and expertise. African governments and businesses could use those investments to develop local capabilities and replicate some of the technologies within their own economies.
He said countries could also consider the issue of data sovereignty, particularly as geopolitical competition increases concerns about dependence on foreign technology providers.
African governments might prefer some data to be stored within their own jurisdictions to reduce the risk of losing access if international relations deteriorate.
Blackmore said the location of data centres would depend partly on the availability of reliable electricity and water.
He acknowledged that cooling requirements could create additional pressure on water resources. Countries would therefore need to assess their natural resources and infrastructure before deciding where to establish such facilities.
Some locations could attract investment with existing infrastructure, while others would need to invest in electricity transmission, digital connectivity and water systems before becoming competitive.
He said Africa already had opportunities to attract some investment but would need to prepare for further opportunities over the coming years.
Affordable electricity is key to competitiveness
High energy costs could undermine Africa's ability to attract investment in data centres, mineral processing and other energy-intensive industries.
Blackmore said governments should consider allowing greater private-sector participation in electricity markets while maintaining regulation and oversight.
He pointed to telecommunications as an example of a sector in which private investment had helped expand services across much of the continent.
He said a similar approach could help increase electricity generation.
"Let the private sector start providing energy," he said.
Governments would still need to regulate the sector, oversee environmental standards and ensure that electricity pricing remained competitive.
Blackmore said increased supply could help put downward pressure on prices, provided markets operated effectively.
He also stressed that governments had a continuing responsibility to invest in electricity transmission infrastructure.
Private companies could generate power, but governments needed to ensure that electricity could move efficiently through the grid to businesses and households.
He said broader reforms of energy markets could create more investment opportunities across the continent.
For Kenya, the issue has implications beyond attracting technology companies.
Reliable and affordable power would also support manufacturing, agricultural processing and other businesses seeking to expand production.
Without adequate energy infrastructure, countries could struggle to convert mineral resources and technological opportunities into competitive industries.
Africa must negotiate better investment deals
Blackmore warned that foreign investment could fail to deliver broad economic benefits if governments focused mainly on attracting capital without considering how local economies would participate.
He said investment agreements could include requirements for companies to employ local people, develop their skills and transfer knowledge.
Governments could also encourage foreign investors to source goods and services from local suppliers.
"We provide an environment where investment, foreign, let's call it foreign investment, would thrive, but in return we also have requirements," he said.
He added that companies could be expected to employ local workers, including through arrangements that increase the proportion of skilled local employees over time.
Such conditions would help African countries build domestic expertise and reduce dependence on imported skills.
However, Blackmore cautioned that governments needed to negotiate these requirements carefully.
He said conditions that significantly undermined a company's expected returns or growth prospects could discourage investment.
The objective should be to ensure that foreign investment benefits the host economy without making projects commercially unattractive.
He also identified currency fluctuations and the repatriation of profits as challenges facing African economies.
Foreign investors may bring capital into a country and generate profits, but some of those earnings eventually leave the local economy.
Exchange-rate volatility can also complicate investment decisions, particularly when financing is obtained in foreign currency but repayments must be made in local currency.
Blackmore said regional economic integration could help address some of these challenges by creating larger markets and potentially improving stability.
He also argued that local businesses should have opportunities to invest in the industries emerging from the global energy transition and technological changes.
"I would like to be part of this growth as an African," he said.
He said governments needed to implement policies that would allow local businesses to participate in the opportunities created by new investment.
These included expanding electricity transmission, opening energy markets to private investment and ensuring that infrastructure plans moved beyond policy statements to implementation.
Transparency can prevent hostility from communities
Blackmore said local communities were more likely to support foreign investment when they could see how projects would benefit them.
He argued that transparency in investment agreements was essential to building public confidence.
"I think there's only one thing that needs here, and that's transparency in these deals," he said.
If communities could see that investments would create jobs, support local suppliers and contribute to the economy, he said, they would have fewer reasons to oppose them.
However, he warned that public suspicion could grow when governments negotiated resource deals without clearly explaining the benefits.
He said communities could become hostile when resources were committed to investors but the promised economic gains were not visible.
Blackmore argued that governments should involve citizens and other stakeholders when developing investment policies.
The terms of major projects should make clear how the host country and its people would benefit.
He said transparent agreements and effective communication could help address concerns about foreign investors.
The issue is particularly important for projects involving natural resources, where communities may bear the environmental and social costs while seeing limited economic benefits.
Blackmore said African governments should avoid agreements that allow valuable resources to leave the continent without meaningful contributions to local development.
Regional cooperation could strengthen Africa's bargaining power
Blackmore said African countries would struggle to compete individually for some of the major investments required to develop mineral processing, energy and digital infrastructure.
The continent's 54 countries have different populations, languages, economic structures and development priorities. Many have relatively small domestic markets.
He argued that governments needed to work together to create larger markets and coordinate investment strategies.
"We can't afford to work as separate countries," he said.
He proposed stronger regional cooperation, beginning with regional economic groupings and potentially expanding into wider continental arrangements.
This could involve coordinating investment policies, harmonising relevant regulations and improving the movement of people and capital across borders.
He also highlighted the importance of connecting electricity grids and developing shared infrastructure.
Blackmore said investors would find it easier to operate across several countries if they encountered predictable and broadly consistent rules.
Under such an arrangement, countries could specialise in different parts of a regional value chain rather than attempting to establish every industry within their borders.
Some countries could focus on mineral extraction, while others with reliable and affordable electricity could become processing centres. Others could provide transport, logistics and export facilities.
"Not every country has to have all those aspects in each country," he said.
"We can piggyback as we develop off the regional strengths."
Such cooperation could help countries overcome limitations in their domestic markets and attract investments that might otherwise be too large or costly for individual economies.
The World Bank has similarly argued that Africa's next phase of economic integration should focus on connecting production across borders, reducing regulatory barriers and strengthening transport, energy and digital networks. Its August 2026 report, Integrating Africa: From Threads to Hubs, emphasises the need to turn regional agreements into functioning markets.
Infrastructure must underpin the next phase of growth
Looking ahead, Blackmore said African governments needed to take a long-term approach to infrastructure development.
He identified electricity, transport, ports, logistics and digital connectivity as priorities.
Reliable energy would support mineral processing, agricultural production, data centres and other industries. Efficient transport systems would reduce the cost of moving people and goods within and between countries.
Ports would also be important for businesses seeking to export processed products to international markets.
Blackmore said Africa could build on the telecommunications infrastructure already developed across much of the continent.
Access to mobile phones and communications networks could provide a foundation for broader digital infrastructure and new businesses.
However, governments needed to connect this digital potential with investment in the physical economy.
"We've got to take care of that physical economy in terms of logistics and energy, and then look at this digital economy," he said.
The two would be mutually reinforcing. Better electricity and transport would support digital industries, while stronger digital networks could improve the efficiency of businesses and public services.
Africa must avoid repeating past mistakes
Blackmore warned that geopolitical competition between major powers could create risks for African countries seeking investment in critical minerals and technology.
He said governments needed to be careful not to undervalue their natural resources when negotiating with foreign investors.
The danger, he argued, was that countries could sell or commit their resources under agreements that delivered limited benefits to their populations.
"We've made these mistakes in the past," he said, referring to deals whose terms were not fully understood or publicly known and which produced little impact for local communities.
He said Africa needed to develop a coordinated approach to deciding how its resources would be marketed and how agreements with foreign powers would be structured.
The objective should be to ensure that economic benefits reached communities and supported long-term development.
"We have what the world wants. We need to come together and agree how are we going to sell it, how are we going to market it," he said.
Blackmore said the same principle applied whether the potential investor came from China, the United States or elsewhere.
Africa should not allow competition among global powers to determine the terms on which its resources were developed.
Instead, governments should use their resource endowments to negotiate arrangements that support industrialisation, skills development and local economic participation.
He said the continent could look significantly different in the next decade or two if governments made the right decisions now.
His warning comes as global investment increasingly targets strategic industries. UN Trade and Development reported in July 2026 that Africa attracted about $70 billion in foreign direct investment in 2025, although the gains were concentrated in particular countries and sectors.
The reforms Africa cannot postpone
Blackmore said African governments needed to understand how geopolitical developments, energy prices, interest rates, artificial intelligence and trade disruptions affected their economies and businesses.
He identified competition over technology, supply-chain security and the fragmentation of global trade as important forces likely to influence investment decisions.
Companies were increasingly concerned about disruptions to supply chains and were seeking ways to reduce uncertainty by diversifying suppliers and production locations.
This could create opportunities for African economies able to provide reliable infrastructure, predictable regulations and competitive production costs.
But Blackmore cautioned that the continent would need to prepare for these opportunities rather than assume investors would arrive.
He urged governments to invest in energy production, electricity transmission, logistics and digital infrastructure while implementing policies that encourage private investment.
He said Africa's natural resources and renewable energy potential gave it an opportunity to participate more substantially in emerging industries.
The immediate challenge was to turn that potential into practical investment plans and infrastructure.
"If Africa has that energy in large supply, we will attract a large portion of that investment," he said.
"But that is for years to come, we need to prepare ourselves starting now,” he said.
