The African Investment Forum (AIF), organized by the African Development Bank (AfDB), concluded with impressive commitments totaling $1 billion for critical minerals investment.
The year’s event focused on unlocking Africa’s economic potential, with highlights including a $50 million initiative to bolster small businesses and trade, and a $42 million fund dedicated to nurturing African tech startups. Veronica Bolton Smith, CEO of the Critical Minerals Africa Group, spoke to the forum about the surge in investment interest.
“Africa remains one of the last frontiers that offers a big return on investment for global stakeholders. Critical minerals, as enablers of the energy transition, are central to this interest.
“But beyond extraction, there’s a pressing need to ensure these resources fuel homegrown industrialization and job creation.”
Veronica Bolton Smith, CEO of the Critical Minerals Africa Group
The forum emphasized that Africa’s strategic importance in the critical mineral supply chain cannot be overstated.
Minerals like lithium are integral to manufacturing batteries for electric vehicles, while cobalt and nickel are essential for various renewable energy applications.
However, stakeholders acknowledged that Africa’s ability to maximize the benefits of these resources hinges on adopting robust policies for value addition, beneficiation, and sustainability.
A recurring theme at the forum was the need for African governments to establish comprehensive strategies to capitalize on their critical mineral reserves.
“Often, governments are late to the party with these trends. We need joined-up thinking between countries and regions to create competitive value chains, encourage mineral processing, and boost local manufacturing.”
Veronica Bolton Smith, CEO of the Critical Minerals Africa Group
Currently, 90% of global mineral processing takes place in China, highlighting a significant opportunity for African nations to develop local processing and manufacturing capacities.
By doing so, Africa could capture a greater share of the value generated from its natural resources, rather than merely exporting raw materials.
Bolton Smith also urged leaders to align mineral extraction with industrialization plans, ensuring that investments contribute to long-term economic growth and development.
“Processing and manufacturing on the continent at lower costs can attract investors, create jobs, and reduce Africa’s reliance on imported goods,” she added.
Balancing Economic Growth with Sustainability
With growing global demand for critical minerals, African nations face the challenge of balancing economic growth with environmental sustainability and community well-being.
While the African Minerals Development Centre (AMDC) has developed frameworks to promote responsible mining practices, enforcement remains a key issue.
“For me, it comes down to enforcement. Countries already have strategies and policies in place, but without enforcement, it makes little difference.
“Investors must be held accountable for adhering to legislation and ensuring that local communities are not negatively impacted.”
Veronica Bolton Smith, CEO of the Critical Minerals Africa Group
She called for stricter penalties and follow-up mechanisms to ensure compliance with regulations. “We need to be clear that there will be consequences if communities are displaced or affected by investor practices. Protecting local communities must be a priority,” Bolton Smith added.
Hydrogen production emerged as another critical focus at the forum. Namibia was highlighted as a leader in this space, with significant potential for producing green hydrogen to meet rising global demand from regions like Japan, Korea, and the European Union.
“Hydrogen production is crucial for Africa,” Bolton Smith noted. “Critical minerals are required to enable hydrogen technologies, presenting a revenue-generating opportunity for the continent.”
Africa’s vast renewable energy resources, such as solar and wind, position it well to lead in green hydrogen production. However, participants at the forum stressed the importance of investing in infrastructure and technology to harness this potential effectively.
The deals and discussions at this year’s African Investment Forum reflect a growing global recognition of Africa’s strategic importance in the green energy transition.
While the continent’s critical mineral reserves are a significant asset, the forum underscored the importance of translating this potential into tangible benefits for African economies and communities.
As Africa positions itself as a key player in the global energy transition, the outcomes of initiatives like the AIF will play a crucial role in shaping the continent’s future.
By leveraging its resources strategically, Africa has the potential to drive sustainable development, create jobs, and secure its place in the clean energy revolution.
READ ALSO: 2024 Set to Shatter Global Heat Records