Africa holds 30% of world’s critical minerals but captures less than 5% of value: UN

Africa is home to about 30% of the world’s critical mineral reserves, yet earns less than 5% of the value added from those resources, the United Nations Economic Commission for Africa (ECA) has said, urging governments to move beyond raw mineral exports and build regional manufacturing industries.

The stark imbalance means Africa’s biggest challenge is no longer discovering mineral deposits but developing the industries, financing and institutions needed to benefit from the global clean energy transition, Hanan Morsy, the ECA’s Deputy Executive Secretary and Chief Economist, said on Friday.

“That statistic should concern us far more than the size of our reserves,” Morsy told ministers, policymakers and industry leaders at the Ministerial Forum on Critical Minerals, Value Chain and Beneficiation, hosted by the African Development Bank (AfDB) in Abidjan.

“It tells us that our challenge is no longer geological. It is economic and institutional. The question before us is therefore not whether Africa should participate in the global energy transition. It is on what terms.”

The warning comes as global demand for minerals such as lithium, cobalt, graphite, manganese, nickel and rare earth elements continues to rise, driven by the rapid expansion of electric vehicles, battery manufacturing and renewable energy technologies.

Morsy argued that Africa risks remaining a supplier of raw materials unless it expands further down the value chain into manufacturing industries.

She said beneficiation should no longer be viewed simply as processing minerals before export, but as building industrial ecosystems capable of producing battery materials, electric vehicles, green steel, fertilisers, recycling industries and advanced manufacturing.

“If we define success only as refining minerals, we risk remaining suppliers in someone else’s industrial strategy,” she said.

“Our objective should be to build industrial ecosystems, not simply processing plants.”

Rather than pursuing separate national industrial strategies, African countries should develop integrated regional value chains under the African Continental Free Trade Area (AfCFTA), Morsy said.

She noted that battery manufacturing requires much more than mineral deposits alone, including reliable electricity, transport infrastructure, processing facilities, manufacturing capacity, finance and markets—assets few African countries possess individually.

“Africa’s comparative advantage therefore lies not in twenty competing national strategies, but in integrated regional value chains under the AfCFTA.”

She added that the continent’s minerals strategy “will depend less on what happens inside mines than on what happens across borders.”

Financing remains a major hurdle

Morsy also identified financing as one of the biggest barriers to industrialisation, saying Africa has abundant investment opportunities but too few projects that are sufficiently prepared to attract long-term investors.

She highlighted initiatives such as the Critical Minerals Acceleration Facility and the New African Financial Architecture for Development as important steps toward shifting investment away from mining alone and towards broader industrial development.

According to her, African pension funds, sovereign wealth funds and development finance institutions should play a much bigger role in financing industries across the continent instead of investing predominantly overseas.