Africa to transition from raw material supplier to industrial hub in global economy

By Gulsum Incekaya and Emir Yildirim

ISTANBUL (AA) - Africa is shifting from being a raw material supplier to transition to an industry-focused structure as the continent enters a new phase to become a new industrial center in the global economy, the head of entrepreneurship and investment at the African Union Commission told Anadolu.

Islam Swaleh said Africa became a key player in the global economy due to its demographic structure, natural resources and market potential, boasting the world’s largest and youngest workforce with a population of over 1.4 billion, 60% or more of whom are below the age of 25.

Swaleh noted that Africa also harbors around 60% of the world’s uncultivated agricultural land, which makes it attractive in global food security.

He noted that Africa’s strategic minerals like cobalt, lithium, platinum and rare earth elements (REEs) are critical for renewable energy and digital technologies. He said the African Union’s Africa Mining Vision outlined the fundamental approach in this area.

Swaleh emphasized that the primary goal of the African Continental Free Trade Area (AfCFTA) is to transition the continent from merely exporting raw materials to a processor of raw materials to support sectors like battery production, solar energy and electronics.

He said the AfCFTA is key in creating a large and integrated market among African nations as it strengthens the continent’s economic position by establishing Africa into a single production and trade area.

Swaleh said that events like the African Union Private Sector Forum, which bring together investors and entrepreneurs, offer great opportunities for cooperation and demonstrate Africa as a proactive player in the global economy.

He noted that deficiencies in governance and lacking infrastructure are some of the most important reasons why Africa’s national wealth has yet to be turned into development — shortages in energy, transportation, storage and irrigation lead to a decline in productivity in agriculture.

While mechanisms like the private sector forum strengthen investor confidence, high levels of debt in some African countries and difficulties accessing affordable finance are main obstacles hampering productive investments to grow.

Swaleh said Africa’s future depends on a shift towards a value-added and industrialized industry, as being a mere raw material supplier weakens the trade balance in the continent, calling for a need for structural transformations across the continent.

Africa as a mere raw material supplier is prone to fragility, which limits employment and weakens the trade balance resilience. The continent still imports over $50 billion worth of food per year, despite its unseized agricultural potential, Swaleh said.

He noted that the African Union’s industrialization strategy for the continent is one of the key tools to realize this shift. The union’s mining vision focuses on enrichment and processing processes for battery, electronic and renewable energy component production.

He said the rising interest in Africa amid shifting global power balances comes as no coincidence, as this stems from the interest in strategic minerals, agricultural potential and developing industrial capacity.

Swaleh emphasized Africa’s role in providing critical input for the development of green technologies and its rapidly growing consumer base.

“Africa is increasingly seen as a location for new industrial capacity, not just extraction," he said.