By Dalu Ajene
Africa is endowed with vast natural resources, from fertile agricultural land to abundant minerals and energy reserves. It boasts of having 30% of the world’s mineral reserves, 12% of oil reserves and 8% of its natural gas. Africa is home to vast gold, diamond, cobalt and rare earth minerals crucial for the digital modern economy. It also has over 60% of the world’s best solar resource, abundant enough to contribute meaningfully to the continents power needs with clean energy.
While difficult to estimate, the total value of Africa’s natural capital is said to be in the trillions of dollars with mineral wealth valued at hundreds of billions annually. South Africa’s potential mineral wealth is estimated at $US2.5 trillion, while the mineral reserves of the Democratic Republic of the Congo are thought to be worth $US24 trillion. Nigeria’s natural wealth estimates suggest a total value of around $US700 billion in mineral deposits. Africa’s agricultural potential worth in 2023 was an estimated $US280 billion and projected to grow to more than $US1 trillion by 2030.
However, even with all this natural wealth, the continent’s economic potential remains largely untapped due to structural challenges, including inadequate infrastructure, lack of power, limited access to finance, and inefficient management of natural resources. Most critical is that Africa’s natural resources are not optimized via beneficiation or by converting into value added products, leading to the greatest loss of value.
During the Africa Debate, a premier conference, bringing together the world’s most influential leaders to discuss and debate the continent’s trade, I engaged on the pertinent dialogue, on whether digital technologies can unlock Africa’s resource economy. In a digital age, the real question is not whether digital technology can play a transformative role in unlocking Africa’s natural capital and drive economic growth, but how it can be deployed cost effectively to retain value and unlock greater, measurable returns — for governments, investors, and communities alike.
Specifically, how can digital technology enhance identification of natural resources, develop data analytics for sustainable mining techniques and rejuvenate our local forestry, water, and critical minerals for a sustainable future. Furthermore, how can digital technology subdue illegal financial flows? Technology has so much to play in enhancing Africa’s natural resource potential. The continent needs a ‘whole-Africa’ approach and a multifaceted strategy that includes institutional reforms, international assistance, and the integration of digital technologies in all facets of engaging with our natural resource.
Africa needs to mainstream Artificial intelligence (AI)/Digital Technologies in Africa’s economy. This could go beyond extraction and value add, to enhancing the detection and prevention of financial crimes such as money laundering, tax evasion, and trade mis-invoicing.
The private sector has a role to play in catalysing digital technology for Africa’s growth. There are good business cases of digital technologies in use across Africa where tech has thrived and unlocked natural capital in Africa. Kenya’s mobile payments innovations through M-Pesa Africa processes $US1.4 trillion annually, now expanding to cross-border mineral royalties. When Tanzania’s mandated mobile payments for mining royalties, government revenues increased 47% in 2 years. South Africa’s De Beers’ Tracr has made strides in resource traceability using blockchain to track 100% of Botswana’s diamonds from mine to market. This is easily adaptable for Nigerian solid minerals or DRC’s cobalt.
The Bank has continued to leverage technology to enhance transparency, traceability, and market access in key African sectors like mining, agriculture, and energy. This involves initiatives such as our digital trade platforms, Straight2Bank, that bring the future of banking to clients’ fingertips. The bank has also announced a landmark agreement worth approximately $US 70 million to loan to IFC in Kenya to support local companies building and expanding digital infrastructure. In Agriculture, Standard Chartered, through its SC Ventures arm, launched Tawi, an agri-tech platform/digital marketplace designed to secure e-commerce transactions, financing and value-added services for the agricultural sector. Furthermore, the bank is involved in building the much-needed infrastructure required for digital technology to thrive in Africa via financing everything from solar power generation to fiberoptic back-bone and last mile fiber deployment, and build out of data center’s required by data aggregators.
Standard Chartered Bank’s initiatives have the potential to unlock trade and growth opportunities via digital technology enhancements that benefit critical natural resource sectors in Africa that will drive sustainable economic development.
However, African governments, private sector companies, and development institutions must work together to establish policies that make digital application effective, invest in digital infrastructure, promote digital literacy, and support the development of digital initiatives that will unlock the continent’s natural capital.
The writer is CEO, Standard Chartered Bank Nigeria Limited
