WEF 2024 Promotes Local Value Addition to Enhance Growth in Africa
During the 54th World Economic Forum 2024 (#WEF2024), discussions about Africa took place as a side event. The major theme that emerged is whether Africa can finally harness its vast resources via commodity-led industrialization to move up the Global Value Chain (#GVC).
In a discussion panel moderated by African Business MD Omar Yedder, EVP of Africa EXIM Bank Denys Denya, Africa Finance Corporation Director of Finance Sanjeev Gupta, Tristar Group CEO Eugene Mayer delved further into the timely and critical topic.
Afreximbank’s Denya outlined several Local Value Additions (#LVA) success stories which are becoming more and more common. As cases in point, Cote d’Ivoire, Cameroon, Ghana have all been able to successfully process more cocoa locally.
“There was a time when Côte d’Ivoire processed only 25% of its cocoa. We intervened by facilitating the native entrepreneurs to produce intermediate products like cocoa butter and cocoa powder. With about 585,000 metric tonnes of processed cocoa annually, Côte d’Ivoire has now overtaken the Netherlands.”
Afriximbank EVP Denys Denya
Afreximbank’s cocoa scheme did not just encourage the production of chocolate but actually advocated gradual steps and explored possibilities that respond better to local or regional needs. Other than chocolate, the producers manufactured a range of products such as cocoa butter, cocoa powder and chocolate-flavored liqueur.
In South Africa, Afreximbank financed the building of a #LocalBeneficiation plant for raw titanium ore. Nyanza Light Metals received a loan of USD 750 million to add value to titanium ore.
“Africa is at a stage of industrialization where it can aspire to evolve into a major international automotive player within the next 10-20 years.”
In DR Congo and Zambia, which are rich in #CriticalMinerals for the #GreenTransition, Afreximbank was pleased to finance the building up of capabilities for manufacturing of batteries for Electric Vehicles (#EV).
Tristar Group’s Mayer underlined that the fortune of many African countries is inextricably linked to its huge reserves of minerals. That is why the AU #Agenda2063 promotes industrialization as one of its flagship programs.
“Accelerating industrialization requires a strategic shift from the basic extraction and export of commodities to huge investments in local transformation capabilities supported by conducive investment policies and stable macro-economic environment.”
Tristar Group CEO Eugene Mayer
On his part, AFC’s Gupta narrated the success of the Gabon’s timber industry to move up the value chain. Rather than shipping timber logs, Gabon now exports furniture. Similarly, Uganda is now exporting finished T-shirts, rather than raw cotton. Chad is also exporting processed meat, rather than livestock.
Achieving greater #LVA in Africa would require coordinated strategies nationally, regionally and even at the continental level. The #AfCFTA is a key instrument which allows the free flow of products and talent to realize the regional value chain and tight integration needed to make #industrialization work.