Africa is endowed with abundant and diverse natural resources and natural capital wealth. Nearly 8% of the Earth’s natural gas reserves, one-third of the world’s mineral reserves, and one-tenth of the world’s oil reserves live in Africa. Also, more than two-thirds of the world’s cropland and one-third of the world’s CO2 storage from tropical rainforests is located in Africa. Africa’s mineral wealth makes it potentially one of the richest continents, but Africa is home to the world’s poorest countries.
Despite historically low emission levels compared to other regions, Africa’s CO2 emissions are increasing rapidly due to increased emissions from the tropical countries. This recent growth has been driven by the increased extraction and consumption of natural resources associated with increasing material use on the continent and abroad in recent decades.
As indicated in Sustainable Development Goals 8.4.11 & 12.2.12, it is important for Africa to focus on sustainable exploitation management and consumption of natural resources. But while the literature is replete with studies on the material footprints of nations and the world at large, there is a lack of studies aimed at tracing the trends and understanding the determinants of Africa’s resource extraction and footprint.
The extraction and export of raw materials in Africa is increasing
The findings of a new study which calculates sub-Saharan Africa’s resource footprint over the past two decades shows that production and consumption have nearly doubled between 1995 and 2015. Africa is a net exporter of resource footprints across all material categories – biomass, building materials, fossil fuels, and ores. Raw material export equivalents, also known as resource footprints, embodied in African exports of goods and services to the rest of the world, increased by 53%, from 1.95 gigatons in 1995 to 2.98 gigatons in 2015.
The resource footprint in African exports increased for almost all African countries. Countries such as South Africa, Egypt, Nigeria, Algeria, Angola and Ethiopia experienced the highest growth in commodity equivalents of exports during the period. Meanwhile, the biomass footprint in African exports increased by 43% over the same period, reflecting Africa’s increasing exports of agricultural commodities, such as cocoa, palm oil, coffee, tea and cotton, among other cash crops, and horticultural products, particularly to Europe and Asia.
The fossil fuel footprint in African exports was highest in South Africa, Algeria and Nigeria, while West Africa (Mauritania, Guinea and Ghana) and Central Africa (Democratic Republic of the Congo) accounted for more than a third of the ore footprint.
These rising levels of commodity equivalent of exports reveal the strong link between resource extraction and growth strategies of African countries. Is this rewarding and sustainable?
The cutting down of large carbon sinks and the excavation of mineral resources for export and the attendant adverse impacts on the environment and climate change have not led to resilient growth, economic transformation and prosperity on the continent.
There is a lack of structural transformation, while informal employment has increased over the years. This is the conclusion of a study that will be published in 2023 that informal workers in Africa are mostly in the lower segment of the labor market, a dead end with little chance of moving up the job ladder.
There are bigger questions about how African countries can create opportunities for these low-ranking casual workers to move up the job ladder. Can African countries create better jobs using their natural resources?
The disturbing correlation between debt and the resource footprint
The findings of this study reveal a strong and positive correlation between government debt and the commodity footprint in African exports.
This is disturbing. Given the skyrocketing debts of many African countries, the exploitation of natural resources is one of the main ways of combating their debt crisis, albeit at a high environmental cost.
With the current growth and development paradigm, commodity equivalents for export will increase substantially in an effort to service their debts with revenues from minerals and oil, but this will have disastrous consequences for the environment.
While much of the world focuses on the next steps in tackling the climate crisis, tight funding and rising debt mean that climate action in African countries is taking a back seat. Rising debt and intensified extraction of raw materials for export will leave Africans in extreme poverty.
This finding demonstrates the urgent need to bring the debt issue to the forefront of climate change discussions, and the call for lenders to recognize their role in Africa’s increasing environmental burden.
Policy options
The current report from the Intergovernmental Panel on Climate Change (IPCC) points to the urgent need to contain global warming to relatively safe levels, but this requires global cooperation, such as cooperation with the African government on this issue.
In the short term, it is important for both multilateral and bilateral lenders and the international community to accelerate debt restructuring and provide the necessary support with all seriousness and urgency to put countries back on a more sustainable fiscal path. Distressing debt levels mean there is very little fiscal room to invest in health, education and climate to support the population.
The ongoing negotiations on debt restructuring should take into account these interfaces with the environment and climate change, as well as the mutual benefits. With the support of the international community, it is important to put together a lake flexible and effective framework for the resolution of sovereign debt that can provide African countries with the necessary financing guarantees and debt relief in a timely manner.
In the long run, African countries need to rethink their growth and development paradigms and focus on creating wealth by adding value to these vast resources. With all the natural resources and the discovery of new rare earth elements (cobalt, lithium, nickel, tantalum, tungsten, etc.) essential to facilitate the transition to green energy, African governments need to focus on how to become more involved in the value chain across Europe. all material categories, especially in the manufacturing sector.
Given the large reserves of many critical minerals on the continent, particularly in South and East Africa, Africa should work to position itself as the global supplier of critical minerals and a hub (mining and production) for the acquisition of rare earth metals in the world.
This would involve developing new approaches and policies that ensure mutually beneficial mining investments on the continent aimed at wealth creation, in particular investments in the networks and value chains and leveraging the African Continental Free Trade Area (AfCFTA) to boost productivity and investment.
Also, as the Dangote group has done in the construction of the oil refinery in Nigeria, African governments should create the conducive environment and necessary support, such as providing public incentives for private projects to attract private financing to enhance the networks and value chains in the industry.
