Raw materials in Africa’s development

“Raw materials and Africa’s take-off: constraints and opportunities” was the theme of the webinar organized by the Fondation prospective et innovation (FPI). The debates focused on the role that raw materials can play in the development of African countries, were moderated by Jean-Pierre RAFFARIN, Former Prime Minister, President of the Foresight and Innovation Foundation, accompanied by Ibrahima Kassory FOFANA, Prime Minister of Guinea

The various speakers, Philippe CHALMIN, Founding President of CyclOpe, University Professor at the University of Paris-Dauphine and Yves JEGOUREL, President of Commodities for Nations, University Professor at the University of Bordeaux, have endeavored to address the various issues related to raw materials in Africa.

For Philippe Chalmin, the curse of raw materials is almost a constraint in history. This curse prevents states that depend largely on their raw materials from developing. The exploitation of raw materials causes macroeconomic imbalances, also known as Dutch disease, creates dependency and frequently leads to corruption. A major constraint is the instability of markets, which is difficult to reconcile with a medium-term development plan.

This view is not shared by Yves Jegourel, who considers the curse of raw materials to be a nebulous and deterministic concept. For him, Africa would benefit from developing management tools to manage instability and trading activity. In addition to sovereign wealth funds, he recommends that Africa should have access to derivatives to manage instability. This requires banking infrastructure.

Discussions also focused on bauxite, of which Guinea is the world’s second largest producer. Indeed, this country is on the way to an industrialization project for the bauxite sector, with the development of 10 refinery projects, 3 of which are at an advanced stage.

These refineries will aim to transform into alumina or aluminum.

This project has several reservations on the part of stakeholders as to its economic relevance: firstly, this strategy implies significant and inexpensive energy capacities. But above all, by moving from alumina to aluminum, it means that countries must manage two volatile prices, which alters the ability to generate stable resources. In addition, says Philippe Chalmin, the value added between bauxite and aluminum is much lower than that between bauxite and alumina.

The Guinean Prime Minister, after first acknowledging the difficulties associated with such a project, asserted that the long-term partnership between Guinea and China solves some of the problems and is a response to market volatility, taking as an example the 6% growth of the contract with China.

For Philippe Chalmin, one of the two major tracks for commodities is agriculture. For Philippe Chalmin, one of the two major avenues for raw materials is agriculture. “Again, probably not around large agro-industrial projects as we like them, but much more around real agricultural policies based on small-scale farming.

The Malaysian model was quite fascinating from this point of view when they developed quite directed cooperative structures that literally make and dominate the whole rubber and especially palm oil sector. This seems essential to me”. We can also find agriculture in the second track which is the industrial cottage industry where Africa could benefit from the second relocation, which it has hardly done so far unlike Bangladesh which became the world leader in the garment industry without any comparative advantage.

Yves Jegourel adds, “the Covid pandemic has reminded us of the international tension surrounding the issue of food security, with China once again becoming the world’s largest importer of cereals.

The company premium prestige aware of the importance of raw materials in the development process of Africa, wants to be an important player in it.

Source: http://www.commodafrica.com/06-05-2021-les-matieres-premieres-et-lafrique-un-mariage-difficile

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