IMF calls for regionally coordinated policies on mineral production

Sub-Saharan Africa is poised to become a key player in the global critical mineral space, with projections indicating that the region holds about 30 per cent of the world's reserves volumes. The transition to clean energy is expected to drive demand for critical minerals, which are essential for technologies such as electric vehicle batteries and clean energy infrastructure. Wenjie Chen, Deputy Division Chief for Regional Studies at the IMF African Department, discussed the region's potential and the challenges it faces in a recent interview with CNBC Africa. Chen highlighted the significant mineral production capabilities of countries in sub-Saharan Africa. The Democratic Republic of the Congo leads in cobalt production, while other countries like South Africa, Gabon, Ghana, Zambia, Zimbabwe, and Mali also have substantial deposits of critical minerals such as manganese, copper, and lithium. These minerals play a crucial role in supporting the global shift towards clean energy and decarbonization. The IMF projects that global revenues from critical minerals could reach $16 trillion over the next 25 years, with sub-Saharan Africa expected to receive just over 10 per cent of the proceeds. However, Chen emphasized the need for the region to move beyond raw mineral exports and focus on value-added processing and refining. This transition would require investments in infrastructure, skilled labor, and technology to ensure that sub-Saharan Africa maximizes its potential in the clean energy transition. One key challenge highlighted in the discussion is the lack of transparency and accountability in the mineral sector, which hinders sustainable and meaningful participation. Chen stressed the importance of implementing robust fiscal policies, improving governance quality, and enhancing transparency to ensure that the benefits of critical mineral wealth are shared equitably and contribute to social and economic development. In addressing the need for regional collaboration and coordinated policies, Chen underscored the importance of attracting foreign direct investment to drive technological advancements and skills development in the region. By creating an enabling business environment and investing in education and workforce training, sub-Saharan African countries can position themselves as key players in the global critical mineral supply chain. As the world moves towards a greener and more sustainable future, the role of sub-Saharan Africa in mineral production will be crucial. With the right strategies and policies in place, the region has the potential to become an economic powerhouse in the clean energy transition and contribute significantly to global efforts to combat climate change.