There is no secret that Africa is a naturally gifted country. There is abundance of resources, such as minerals, forests, wildlife, etc. Its potential is not hidden from anyone. A number of countries in Africa were able to successfully lift their growth rates through commodity exports in infrastructure and social development in recent years.
However, according to the latest research conducted by Quantum Global, Angola, Zimbabwe and some other countries have not been able to realize their full potential due to the pitfalls associated with the resources.
Although the country is Africa’s second largest crude producer, its economy has shrunk by 2.5 per cent this year, which is a worrying sign. The mineral-rich continent of Africa boasts of large global shares of several major metals and minerals. The list includes platinum, gold, chromium, manganese, uranium, diamonds, etc. Apart from this, some of the world’s largest deposits of strategically important minerals can be found there. Countries like Democratic Republic of Congo (DRC) and Rwanda together account for nearly 70 per cent of global production of coltan, a rare mineral.
Cobalt, which is used in all electronic gadgetry can also be found in DRC. It is actually home to 50 per cent of the global output of this metal. The price of cobalt has tripled since 2016 on the back of soaring demand. The DRC wants to capitalize on its position in the global cobalt value chain. For this, President Joseph Kabila has signed a new mining code law on 9th March. Executives from major cobalt mining companies of the world, including Glencore, China Molybdenum and Ivanhoe had descended on Kinshasa to dissuade President Kabila from signing the bill, but to no avail.
However, Glencore – the world’s top cobalt miner aims to boost production from its DRC mines from 39,000 tonnes to 65,000 tonnes till next year, according to Quantum Global research. But, despite of all these things, the higher royalties have not been used to uplift the local communities. Political and economic corruption, lack of economic diversification and susceptibility to commodity price volatility have resulted in so-called resource curse.
But countries like Botswana have been able to change the trend. The government of Botswana entered into a 50 per cent partnership with international mining giant De Beers. But, DRC is still in a precarious position. If managed with care, the vast mineral wealth of the country can open the doors for the citizens. But, it can also turn into the same old story, if not managed properly.