The paradox of Potential and Reality: No other continent exemplifies this more than Africa, a continent rich in raw potential, but its value chain is more like a conveyor belt that starts underground and ends up enriching balance sheets elsewhere in the global supply-chain. While Africa’s Fintech industry is booming (hello, M-Pesa and thousands of others), this is mostly shuffling of monetary digits rather than forging new wealth on the Continent.
The Current Flow: Extraction to Extraction (of Value)
There is an embedded classic resource curse in Africa which is amplified by numerous debt traps. Take minerals as an example. Africa produces around 40% of the world’s cobalt, 30% of manganese, and huge chunks of platinum, diamonds, and lithium all critical for the manufacture of EVs, batteries, and renewables. Yet, exports are overwhelmingly raw (e.g., Democratic Republic of Congo ships out 70% of global cobalt unprocessed). This translates into real value-added value elements such as refining and manufacturing, concentrated off-shore, often in China, which controls around 80% of global rare earth processing.
The result is that African debt continues to pile on. Based on 2025 data (and trending into 2026), over a dozen African countries hover at 70-100%+ debt-to-GDP, like Zambia (120%), Sudan (200%+), and even Ghana at around 90%. Much of this is tied to infrastructure loans from China via the Belt and Road Initiative, with $150B+ invested since 2013, which is then often collateralised against resources.
The cycle? Extract → Export → Loan repayment → Buy back processed goods (e.g., Chinese-made solar panels or mining gear). Net result: Capital flight. The IMF estimates Africa loses $50-80B annually to illicit financial flows, much from commodity trade misinvoicing.
Fintech is Africa’s shiny distraction. The industry has had over 1,000 startups by 2025, with valuations topping $50B collectively. But these simply channel payments (remittances, mobile money), and while great for inclusion (700M+ users), they are not widespread creators of base wealth. It’s like building a fancy ATM network on a leaky vault.
Who Controls the Value Chain?
Right now? Not Africa. Foreign multinationals (Glencore, Rio Tinto) and state actors (China’s CMOC, Russia in some spots) dominate extraction. Governments get royalties/taxes (often negotiated poorly), but the chain’s upstream control means pricing power stays external to Africa’s control. OPEC in the oil sector has shown what collective control can do, but minerals lack such co-ordinated unity, hence volatile prices and regional hammering of budgets.
Namibia has suffered this fate with the global downturn of the diamond prices where they are a major supplier but do not manufacture finished diamond goods. Most diamond finishing occurs in India with some in Belgium and Israel while most finished diamond jewellery and luxury item products is concentrated in China and India.
While Namibia controls around 14% of global diamond volume by carats and around 25% by value, it has negligible finishing and downstream finished goods manufacturing production despite Southern Africa producing a large portion of gold and platinum used in the luxury goods manufacturing. This highlights how disjointed African manufacturing is, resulting in major loss of potential downstream value in raw goods.
Flipping It: Your Roadmap, Amplified
To thrive, Africa needs to own more of the chain, and downstream manufacturing to rectify the continent’s extraction economy.
- Mineral Processing: Shift from raw exports to on-continent refining. Zimbabwe’s lithium ban on unprocessed exports (2022 onward) is a start; Nigeria’s pushing steel via Ajaokuta revival. The Goal: Build hubs like South Africa’s proposed Special Economic Zones for battery minerals. This could add 2-3x value (e.g., processed cobalt fetches $50K/ton vs. $20K raw). The Challenge: Energy and skills gaps and requires around $100B+ investment in smelters/refineries.
- Energy Security: Africa can’t process without power. Africa’s got 600M people without electricity, yet untapped solar/wind/hydro potential (e.g., Grand Ethiopian Renaissance Dam). Secure local energy means cheaper inputs for industry. Tie this to green tech: Use domestic lithium for African-made batteries, not just exporting to Tesla. Policies like local content laws (e.g., Angola’s oil sector mandates) could enforce this.
- Commodity Financing: Africa urgently needs to ditch debt-for-resources deals. Instead, utilise sovereign wealth funds (like Nigeria’s or Angola’s) or pan-African banks to finance via futures/commodity-backed bonds. The African Continental Free Trade Area (AfCFTA) could help, aiming for $3T intra-African trade by 2035, reducing reliance on external loans.
- Sovereign Balance Sheets Management: It is time for fiscal discipline and diversification across the continent. Rwanda’s tech hub pivot (post-genocide) shows it’s possible having produced GDP growth 8%+ annually. Debt restructuring (e.g., Zambia’s 2024 deal) buys time, but long-term what is needed is tax reforms to capture more from multinationals (base erosion rules). Regional blocs like ECOWAS could pool reserves for better bargaining.
- Industrial Platforms: Africa desperately needs to change the narrative and build ecosystems, not silos. This should be accelerated with co-ordinated manufacturing clusters—e.g., Ethiopia’s textile parks or Kenya’s Silicon Savannah for tech-infused industry. Additionally there is scope to integrate fintech deeper. Fitech should be adopted to use it for supply chain finance, not just payments (e.g., blockchain for transparent mineral tracking to attract ethical investors). Public-private partnerships should be actively grown with locals in the lead, not as junior partners.
The Pathway to Success
Africa’s leadership vacuum, however often turns “democracy” into a hollow ritual, where incumbents cling to power amid incompetence, corruption, and zero accountability. In turn this has major impact in creating regional stability and a platform for coordinated economic development. The fix? Voters and leaders must demand accountability via anti-corruption bodies, youth involvement (Africa’s 60% under-25 demographic), and regional voting pressure for political non-performers.
This shift isn’t pie-in-the-sky; and currently it’s happening piecemeal. South Africa’s got the muscle with its industrial base and now having Eskom stabilised with regional green hydrogen plans and new Natural gas sources in Namibia and Mozambique could be game-changers. But this in turn requires political will to address anti-corruption, eradicate resource graft, secure land and company rights, and education investments.
