Faith Nyasuguta
Kenya has announced a major transition in its mineral export policy, joining a growing number of African nations that are restricting the export of raw minerals. This move, aimed at boosting local value addition and increasing government revenues, marks a turning point in how African countries manage their vast natural resources.
By building a robust processing industry, Kenya seeks to generate more revenue from its mineral wealth while creating jobs and promoting sustainable development.
Kenya’s Principal Secretary for Mining, Elijah Mwangi, confirmed that the country is constructing a mega gold processing plant valued at KSh 5.8 billion, signaling a bold shift toward keeping value-added mineral products within its borders. The plant, expected to be completed by mid-next year, will first process gold, gemstones, and granite, according to Mwangi. The gold refinery will be located in Kakamega, while a granite processing plant, worth KSh 2.5 billion, will be set up in Vihiga County.
This new policy aligns Kenya with about 10 other African nations that have implemented similar restrictions on the export of raw minerals. For years, Africa has suffered from the practice of exporting unprocessed minerals, losing billions in potential revenue as raw materials are shipped abroad for refining. This results in missed opportunities for job creation and economic growth within the continent.
McKinsey estimates that Africa could generate between USD 200 million and USD 2 billion in additional annual revenue by 2030 if it builds a competitive, low-carbon manufacturing sector. This would also create up to 3.8 million jobs across the continent. Africa’s mineral wealth is vast, holding 92% of the world’s platinum, 56% of its cobalt, 54% of its manganese, and 36% of its chromium reserves.
These minerals are crucial components in green technologies, such as electric vehicle batteries and wind turbines, which are in increasing demand worldwide.
Yet, much of this wealth leaves the continent unprocessed. In 2016, African nations exported an estimated $15.1 billion worth of gold to the United Arab Emirates, according to Reuters. This figure is a sharp rise from $1.3 billion in 2006, highlighting the significant increase in demand for African gold.
However, the majority of these exports occurred without official records or taxes being paid to the African states producing the gold, showing the challenges of raw mineral exports.
By increasing its capacity to process minerals locally, Africa can capture more of the value chain, enabling the export of intermediate goods or final products. This would lead to higher tax revenues, more jobs, and greater economic development on the continent. Several African countries, including Ghana, Tanzania, and Zimbabwe, have already imposed restrictions or regulations on the export of raw minerals, with mixed results.
Despite the potential benefits, experts urge caution. African countries face significant infrastructure challenges that could make it difficult to sustain such policies in the long term. Many nations that initially implemented export bans on raw minerals have struggled to maintain these policies due to the lack of adequate processing facilities and the high costs involved.
Benedikt Sobotka, CEO of Eurasian Resources Group (ERG), warned that there are no automatic benefits from such bans. “African countries must first build the necessary infrastructure and invest in processing capabilities to ensure the success of these policies,” Sobotka said. Otherwise, the continent risks losing out on immediate revenue from raw exports while struggling to reap the long-term benefits.
| S/N | Country | Major Mineral Resources |
|---|---|---|
| 1 | Ghana | Gold, diamonds, manganese, and bauxite |
| 2 | Tanzania | Gold, silver, tanzanite, iron ore, copper, nickel, cobalt, graphite, and uranium |
| 3 | Democratic Republic of Congo (DRC) | Diamonds, gold, copper, cobalt, tin, tantalum and lithium. |
| 4 | Zambia | Copper, cobalt, gold, nickel, manganese, emeralds, beryllium, myriad gemstones, |
| 5 | Ethiopia | Gold, platinum, iron, nickel, chromite and base metals |
| 6 | Uganda | Iron ore, phosphates, copper, marble/limestone, gold, |
| 7 | Mali | Gold, salt, marble and kaolin and limestone |
| 8 | Zimbabwe | Chrome, gold, coal, lithium, and diamonds |
| 9 | Namibia | Diamonds, uranium, copper, magnesium, zinc, silver, gold, lead, semi-precious stones and industrial minerals |
| 10 | Nigeria | Marble, coal, iron ore, gold, silica, lead, zinc, tin ore, manganese |
Kenya’s decision to restrict raw mineral exports is a step in the right direction for the country and the continent at large. However, it will require careful planning and investment to ensure that this bold move pays off.
As Africa seeks to reclaim control over its vast mineral wealth, local processing and value addition will be key to unlocking the full potential of its natural resources. For Kenya, this could mean a future where the country not only extracts minerals but also processes and profits from them, contributing to long-term economic growth and development.
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