Hi from Gaborone, Botswana, where I’ve been all week attending the U.S.-Africa Business Summit.
Botswana is probably best known these days for producing some of the world’s biggest diamonds but also for being one of Africa’s great success stories when it comes to economic development boosted by the sale of its primary commodity. And in recent weeks it’s won admiration from around the continent for its handling of its long-running relationship with De Beers, its South African mining partner. Botswana negotiated a more favorable agreement so the diamond giant now has to hand over a larger share of the gems produced in the country.
The debate about the need for African governments to exert more control of the value extracted from their countries is nowhere more pressing than in the fast-growing ‘green energy’ minerals sector. Investment in these critical minerals rose 30% in 2022 with more than $40 billion spent on finding and producing metals vital to electric vehicles and renewable energy, such as lithium, cobalt, and nickel, according to the International Energy Agency.
Zambia’s minister for commerce Chipoka Mulenga reiterated this point on two panels where I heard him speak on Wednesday. He emphasized the importance of African countries moving up the value chain by retaining more of the processing and development in the countries where the minerals are extracted, rather than simply exporting raw materials. “We’ve done the trading part for many years…we need value addition, it will help stop the capital flight that’s costing jobs.”
Scott Nathan, chief executive of the US Development Finance Corporation, who was on the same panel, was quick to agree. “The countries that control the resources should capture more of the benefit.”
We’re going to be keeping a close eye on how this plays out across the continent so keep reading Semafor Africa.