Manufacturing Africa: How Africa can unlock opportunities in battery manufacturing

Investment in battery manufacturing is poised to revolutionize Africa's industrial landscape, creating thousands of jobs and propelling economic growth. With the launch of the Manufacturing Africa report by the UK Foreign Secretary in Lagos, Africa is positioned at the forefront of shaping the future of battery production. In an exclusive interview with CNBC Africa, Kemi Onabanjo, Country Lead for Manufacturing Africa, shed light on the vast potential for Africa to establish itself as a key player in the global battery supply chain. Currently, Africa's demand for batteries accounts for less than one percent of global demand, with the majority coming from China, Europe, and the US. Despite this, Africa is a significant source of critical minerals such as lithium, manganese, copper, and nickel, constituting over 70 percent of raw materials used in battery production worldwide. However, the value chain in Africa predominantly stops at mining, with limited activities in refining, cell production, assembly, and recycling. The key question posed by the Manufacturing Africa report is how Africa can transition from being a mere mineral producer to a manufacturer of high-value battery products. Onabanjo highlighted three key areas where African countries can enhance their competitiveness and attract investments: refining, cell manufacturing, and assembly. The first major opportunity lies in refining raw materials on the continent. By integrating mining and refining operations, African countries can achieve up to 40 percent cost competitiveness by 2030 compared to global refiners. Nickel, lithium, manganese, and copper are identified as priority metals that Africa can refine at a competitive advantage. A crucial factor for success in refining is securing economies of scale and regionalizing the value chain to meet global demand. In cell manufacturing, Africa can target specific markets like Europe for lithium phosphate batteries, leveraging its geographic positioning to diversify supply sources. Government support is crucial in ensuring the success of these initiatives, with examples from Europe and China demonstrating the importance of subsidies and favorable policies in driving battery production. As Africa embarks on the journey to unlock its potential in battery manufacturing, collaboration between governments, private sector stakeholders, and international partners will be essential. By seizing the opportunities presented in the Manufacturing Africa report, African countries can position themselves as key players in the global battery manufacturing landscape, driving industrialization and economic development across the continent.