About a third of the world’s known mineral reserves are in Africa. Despite this, including known vast reserves of the critical minerals essential to the green energy transition, Africa remains underexplored, underdeveloped, and a recipient of less investment than competing critical-mineral jurisdictions. As of 2022, Africa accounted for only 10 percent of global exploration spending. In 2023, the continent’s share of global investment in minerals was 8 percent.  

Global demand for essential minerals like copper, nickel, cobalt, and lithium is expected to generate revenues of sixteen trillion dollars over the next 25 years, with sub-Saharan Africa potentially capturing nearly two trillion of this total. However, the region must move beyond raw extraction to fully capitalize on this opportunity. By developing local processing industries, these African countries could significantly boost their profits, tax revenues, and the number of jobs created, while also fostering technological advancements.

Indonesia has deployed a diverse range of policy tools, including export bans, to make the most of its natural resource sectors. As demand for clean energy technologies has accelerated—and with it the demand for the minerals involved—Indonesia’s experience has drawn greater interest, particularly in light of the astonishing growth in output and market share of Indonesian nickel.

Indonesia’s record on converting its raw-material export ban to successful economic growth-stimulating investment is decidedly mixed and dependent on external market and technology factors that transpired independently of the Indonesian policymaking process. To endorse these policies as unquestionably worthy of replication in the African context and carry forward implementation without further scrutiny would be unlikely to generate the same results that Indonesia experienced in its nickel sector.

The prevailing view among early movers is that policies such as the recommendations below offer opportunities for economic diversification, infrastructure development, increased revenue generation, fiscal stability, enhanced environmental stewardship, and upskilling of the labor force:

1. Commission technoeconomic studies, under the African Green Minerals Strategy (AGMS), to ascertain where value creation is the most substantial in individual critical-mineral supply chains for the energy transition.
2. Launch new, dedicated Special Economic Zones for critical minerals in resource-rich jurisdictions.
3. Leverage the African Continental Free Trade Area (AfCFTA) to accelerate the formation of continental commodity markets capable of attracting international investment.
4. Create “fast lane” regulatory and permitting approval mechanisms and corporate procurement tools for captive power generation assets dedicated to supplying critical mineral processing and refining facilities.
5. Provide further inducements for carbon-free power projects.
6. Work with Morrocco to institute African sourcing incentives for critical material inputs for its burgeoning lithium-ion battery manufacturing sector.

Advance investment-grade transport infrastructure network investments under the US Partnership for Global Infrastructure and Investment (PGI) and EU Global Gateway initiatives targeting routes to market for priority energy transition critical materials.

These policies are important to help African countries move beyond the raw-extraction stage and bring more of the mineral processing steps in the production chain to the continent. There are real challenges to using export bans to achieve those same goals. Perhaps with the exception of South Africa and northern Africa, there are significant infrastructure gaps in energy supplies, logistics, and transportation. Effective governance is also critical to the sustained impact of such bans, and political instability and conflict in several resource-rich countries remains an endemic problem.

It is crucial, then, that policies are coherent and transparent to create an attractive investment environment.

On the African continent, which has long struggled with the “resource curse,” where nations rich in natural resources have historically failed to translate this wealth into broader economic prosperity, governments are increasingly turning to export bans on raw commodities as a strategy to industrialize their economies. These bans are intended to push beyond mere extraction and boost the development of local processing industries, thereby retaining a greater share of the economic benefits within the continent.

Overall, these export control measures, while well-intentioned, have often fallen short of their objectives. In most cases, they have even negatively impacted the industry by reducing mineral exports, leading to a deterioration in these countries’ positions in global trade—especially as global supplies of these minerals have increased over the past two decades. Instead, policies promoting initiatives like special economic zones, technoeconomic studies, and regulatory “fast lanes” could bear better results for mineral-rich African countries.

Julien Marcilly is the chief economist at Global Sovereignty Advisors.

Bradford Simmons is the senior director for energy, climate and resources at BowerGroupAsia.

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Image: Workers monitor the nickel melting process at a nickel smelter of PT Vale Tbk in Sorowako, South Sulawesi province, Indonesia, March 30, 2023. REUTERS/Ajeng Dinar Ulfiana