(These are key developments within the week across Africa that are worth watching.)
In this edition:
- Africa ponders role as critical minerals bride
- Russia’s Rosatom signs nuclear deals with Burkina Faso, Mali
- U.S. sees role for nuclear power in Africa
- Ethiopia joins Pan-African payments system
Africa ponders role as critical minerals bride
Several African producers of “critical minerals” met in the South African city of Cape Town on October 18 to seek a common front to protect their interests in the face of growing competition between the West and China for the continent’s mineral resources.
“In a supply-chain crunch, who gets priority and which industries will miss out?,” asked Olimpia Pilch, founder of the Critical Minerals International Alliance (CMIA), the organizers of the conference, in opening remarks. “Those who have put in the work to have their own supply chain will be in a much better position,” he said, adding that these resources have become subject to “geopolitics.”
Being in a better position appears to be a key motive driving the current competition for several minerals considered important for the future by geopolitical interests that stretch from China, through Europe to North America.
Copper in the DR Congo, South Africa and Zambia; lithium in Zimbabwe, South Africa and DR Congo; cobalt in DR Congo and Zambia; as well as graphite in Mozambique, nickel in Madagascar and Tanzania represent just some of such critical minerals available in the Southern African Development Community (SADC) alone, according to a pre-conference presentation by the South African Institute of International Affairs.
“You can find sites for mining every mineral in sub-Saharan Africa,” Per Magnus Nysveen, the Senior Partner and Head of Analysis for research firm Rystad Energy told the conference. Their exploitation is now being shaped by factors including the race with China, the need to create regional value chains and the global pressure toward energy transition and low-carbon energy use, the institute said.
Europe aspires to extract, at least, 10 percent of the critical minerals from within while having a 40 percent refining capacity for what it consumes annually, with an additional 15 percent recycling capacity, according to Roberto Cecutti, a representative of the EU Delegation to South Africa. At least, 65 percent of the EU’s supply shouldn’t be reliant on any specific region or country, he said.
The consensus of the conference was that China was ahead and seeking to consolidate its dual approach of funding both infrastructure and investment projects across Africa. China is currently dominant in the low-carbon industry, accounting for about 90 percent of the global output of solar panels while increasing production of wind turbines, according to research company Rostand Energy.
The West has responded with measures contained in the U.S. Inflation Reduction Act, the EU’s Critical Raw Materials Act and the various Minerals Security Partnership with African countries aimed at ensuring future supplies.
Africa, which has the solar-generation potential to meet the planet’s energy needs, according to Rystad, is still dependent on imports to meet its own energy needs. The challenge Africa faces is how to ensure that the benefits of these resources aren’t merely exported, leaving the continent with short shrift as has happened in the past.
Deploying these resources for the benefit and development of Africa was the subject of the ministerial forum and was the high point of the conference. The game-changing factor, according to most speakers, would be the setting up of processing industries within the continent not only to add value but also to create jobs and stimulate local economies.
“We need to have one voice,” declared Malawi’s Minister of Mining Monica Chang’anamuno in summing up the situation. “African countries should start approaching critical minerals as a bloc that can allow us to control the opportunity.”
Russia’s Rosatom signs nuclear deals with Burkina Faso, Mali
Russia’s state-owned nuclear energy company, Rosatom, signed deals with the West African countries of Burkina Faso and Mali to build modular nuclear reactors in both countries for electricity generation.
The agreements, signed during the week as part of Russia’s Energy Week in Moscow, also cover the application of nuclear energy in other fields including agriculture and medicine.
The deal was a follow-up to an understanding reached between Russian President Vladimir Putin and Burkina Faso’s military ruler Ibrahim Traore at a July meeting at the Russia-Africa summit in St. Petersburg, Burkina’s Energy Ministry said in a statement.
Mali’s Energy and Water Resources Minister Bintu Camara signed on behalf of the fellow West African countries. Both countries are among former French colonies in West Africa where juntas took power in recent years and aligned with Russia. Others are Niger and Central African Republic.
Rosatom also has nuclear cooperation agreements with some other African countries including Nigeria, Zimbabwe, Burundi and South Africa. None has materialized in a nuclear power plant.
The U.S. sees role for nuclear power in Africa
The United States sees a role for modular nuclear reactors in helping African countries make the transition to renewable energy and is in discussions towards that end, Bloomberg News reported, citing an official of the U.S. Energy Department.
Talks on nuclear cooperation are currently going on with Ghana, Kenya and South Africa, Energy Department official Joshua Volz was reported as saying at the annual Energy Week in Cape Town organized by the African Energy Chamber. That could result in those countries adopting a modular reactor technology developed by General Electric and Westinghouse. Both General Electric and Rosatom were at the Cape Town event to sell their wares, the news service said.
Ethiopia joins pan-African payments system
Ethiopia joined the Pan-African Payments and Settlements System (PAPSS), which enables rapid payments for goods and services by businesses across Africa.
PAPSS, a unit of the African Export-Import Bank (Afrexim Bank), said in a statement that National Bank of Ethiopia Governor Mano Mihretu disclosed the country’s decision to join at a meeting with the head of the payment system, Mike Ogbalu in Addis Ababa this week.
PAPSS was designed as an alternative to the SWIFT system of international payments to complement the African Continental Free Trade Area(AfCFTA). The African trade area is a brainchild of the African Union aimed at driving continental integration through improved economic and trade exchanges.
Ogbalu described Ethiopia’s membership as a boost to economic activities in East Africa as a whole. “As one of the largest economies in the region, Ethiopia’s participation would bring additional market size, trade opportunities, and financial connectivity to PAPSS,” he said in his statement.
While the payment system has been available in the past two years, membership has been slow to pick up, with activities largely limited to the West African Monetary Zone of mainly English-speaking countries. While PAPSS is yet to disclose the latest list of members, it notes the eastward push as a critical milestone.
“By joining PAPSS, Ethiopia can benefit from streamlined cross-border transactions, reduced transaction costs, and improved financial inclusion for its citizens and businesses,” Ogbalu said.
Briefly
Standard Bank to decide on $4 billion pipeline
Standard Bank is expected to announce soon whether it will finance a US$4 billion pipeline to take crude oil from Uganda to neighbouring Tanzania’s coast.
The project is being developed by France’s TotalEnergies with the participation of China’s CNOOC.
Liberia set for run-off presidential vote
Liberia’s presidential election appears headed for a run-off vote with the top two candidates, including the incumbent George Weah, failing to reach the mandatory 50 percent of the vote.
Weah and his main rival, Joseph Boakai, a one-time vice president, both garnered under 45 percent of the vote each. A winner needs a simple majority to emerge in the runoff.
South Africa to get climate financing from Denmark, Netherlands
South Africa will get financing for energy transition from Denmark and the Netherlands under the Just Energy Energy Transition Partnership.
The partnership, which includes the European Union as well as Germany, France, the U.S. and the United Kingdom, has promised to provide as much as US$8 billion in climate funding.
Economic Indicators
- Nigeria’s annual inflation rate rose to a two-decade high of 26.7 percent in September, on the back of higher food, fuel and a weaker currency.
- South Africa’s inflation rate rose to 5.4 percent in September.
Ahead
October 23
- Two days of the Nigerian Economic Summit starts in the capital, Abuja, bringing together captains of industry and government officials.
October 25
- Namibia’s central bank to announce interest-rate decision.
October 26
- Botswana’s central bank to announce benchmark rate.
- Zambia to release September trade data
Insights Newsletter is published by Afrika Insights, an Ontario, Canada-based business advisory and publishing firm. Email: afrikainsights@afrikainsights.ca