The interplay of mineral and energy security: A nexus approach to Africa's economic diversification

Abstract

The increasing global demand for critical minerals, driven by the energy transition and digitisation, can be a double-edged sword for resource-rich African countries (RRACs). While these countries possess abundant reserves of these minerals, they face a critical decision point. They must adapt their policies to leverage these resources for economic development in a rapidly changing landscape, at the same time balancing national interests with global call for decarbonisation. Simultaneously, the global shift towards renewable energy sources threatens to diminish the market for coal and gas resources, which are abundant in RRACs but underutilised. While this necessitates swift policy and strategic actions to facilitate resource utilisation for economic diversification, RRACs may find themselves in a race against time. Using insights from multi-stakeholder interviews and existing literature, this paper explores avenues for RRACs to industrialise and diversify their economies. The analysis underscores the significance of mineral and revenue utilisation; public-private collaboration; and regional strategies in investment, and supply and value chains for economic diversification in the context of energy transition.