Africa must use its green resources to build heavy industries
Africa has the opportunity to use its green resources to build heavy industries and transform its place in the global economy, African Business said in an article.
For centuries, Africa’s niche in the world economy has been as a supplier of raw materials. To this day, outsiders come to Africa primarily to extract its minerals and other resources; only rarely do investors look for opportunities to harness the continent’s industrial potential.
The energy transition, the great economic shift of the twentieth century, could reinforce this paradigm – or it could, finally, break it.
There is no doubt that Africa will play a key role in the energy transition, if only because of its energy and raw materials. The continent possesses 39% of the world’s renewable energy potential.
Large swathes of Africa, particularly around the Sahara, offer some of the best conditions for solar power globally. There are already multiple projects to construct subsea electricity cables from Africa to Europe, which will allow electrons generated in North Africa to provide power for European industries.
Beneath the ground, meanwhile, Africa boasts an abundance of minerals such as cobalt, copper, iron ore, bauxite and many others. As a result, the continent is playing an increasingly vital role in global supply chains, including for electric vehicles. But the processing of Africa’s minerals mostly happens outside the continent, particularly in China.
Africa does, however, have a chance to scale up its value-added industries at the outset of the energy transition. Many African countries are well positioned to become major producers of green hydrogen, using electrolysis powered by renewable energy. While this green hydrogen could simply be exported, possibly in the form of green ammonia, there are strong advantages to using the resource instead locally, as a feedstock for heavy industries.
Turning the green industrial revolution from a dream into a reality for Africa is an epic task, fraught with risk and complexity; but a task that offers the reward of redefining the continent’s place in the global economic order.
Read full article at African Business