African countries urged to prioritise value addition

Patrick Chitumba recently in Mangochi, Malawi

AFRICAN countries have been urged to prioritise value addition of natural resources to promote growth of viable local industries and curb illicit financial outflows.

Addressing legal practitioners, civil rights organisations and members of parliament from across Africa who attended a week-long African Forum and Network on Debt and Development (AFRODAD) summer school here last week, Mr Paul Msoma, an economic affairs official with the United Nations Economic Commission for Africa (UNECA) said value addition would result in the growth of local industries.

He said Africa was still stuck in colonial legacies, mining laws and taxes, which were hindering development at community level.

“I am glad that a lot of African countries are advocating for value addition of natural resources, a development that has met stiff resistance from the developed countries because their industries will crumble,” he said.

“For example the European Union wants materials in their raw state so that its companies add value to them. Exporting raw materials means our downstream and upstream industries don’t expand or benefit.”

Mr Msoma said upstream raw material linkages include infrastructure development while downstream linkages include capital goods and consumables.

“Europe, China all have gumboots making industries, companies that make mining equipment and even cloth for overalls and raincoats and that is why they want to see the materials in their raw state. On the other hand, if Africa adds value, they have smelters here, which is infrastructure development, many people are employed, communities start rearing chickens, projects for socio economic development and our GDP grows,” he said.

“That’s why there is need for value addition by African countries because the benefits exceed the little benefits we are enjoying now. Value addition creates employment for locals, government enjoys more taxes and generally the surge in socio-economic development.”

Mr Msoma said existing policy drivers on minerals in Africa need to be revised as they subject the continent to dependence on the West and East for aid.

He said an understanding of illicit financial outflows and implementation of the African mining vision, should drive optimal mainstreaming of mineral resources for development.

“The African mining vision promotes for knowledge driven mining sector. It is against the current exploitation of African minerals at the hands of our former colonisers and other countries. This vision advocates for local beneficiation where even explosives used in mines are made locally. There is need for partnership between governments and civic society in making sure an African development agenda is moved ahead, “ he said.

Mr Msoma said Zimbabwe and Malawi were some of the countries leading in advocating for the African mining vision.

“The SADC region has a huge market as compared to EU but because of our minerals EU enjoys more than us and the latter is developing more than us because of our minerals and therefore we need to unite as Africa to get out of the dependency syndrome,” he said.