50% of Africa’s GDP comes from 5 Countries

BY TSHEPO MAGAGANE

Why it is so important to get the mining and industrial policy right for the Transition for African countries!

Countries such as Zambia and DRC have an opportunity with just Copper to go from USD6bn / USD20bn revenue markets to USD60bn – USD100bn revenue markets.

In the discussion, it is important to grasp both Beneficiation and Value-Addition properly. There is an overlap, however, Value-Addition is a function of Industrial Policy in a country.

Important to view this through this framework:

– Primary mining: Employees, PAYE, Royalties, VAT, Corporate Taxes

– Secondary impact: supply-chains which incorporates the local communities

– Tertiary economic impact: Infrastructure – town development – restaurants, shops, real estate, etc

Take South Africa, mining contributes 5% to GDP, however the impact on the wider economy is so vast – where the miners buy the safety goggles, the uniforms, the chemicals, tyres, bolts, spares, consumables – they come from South African companies.

Or take Botswana which just enjoyed its independence day – was the poorest at independence – now see the ecosystem in excess capital from BPOPF, MDCB, Pula Fund!

Or simply travel even to regions in the middle of nowhere like Kathu bn the NW and NC – it is not just a town development but see the OEMs who have a presence there!

Or at a community level – Royal Bafokeng still has exposure to PGMs but is peripheral and they will be able to weather these brutal times in the sub-sector as they control banks, healthcare, telcos, towers, etc!