Name: Inside the new battleground for critical minerals | DW News
Uploaded: 2025-11-29T16:58:19.000Z
Duration: 13 min 42 s
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There's that growing realization that Africa has the leverage, Africa has the minerals.

In terms of data, before we go to perception, Europe is still the biggest trading partner of Africa and also the biggest investor in Africa.

But the Chinese are perceived to be not interested.

In terms of values, then they are transactional.

They like to have a deal and deliver on the deal and ask for the next deal.

Africa, home to huge reserves of the raw materials used to make everything from smartphones and electric cars to wind turbines, is at the forefront of the global race for critical minerals.

As foreign investors come knocking on the door, the question is, who makes the best business partner?

To explore this, I'm joined by James Shikwati, a Kenyan economist and the author of research on African perceptions of international investors.

These critical minerals are of huge geopolitical importance, potentially given giving African leaders a large degree of leverage when it comes to foreign investment.

I would say, first of all is that growing realization that Africa has the leverage, Africa has the minerals and more.

So, of course, distributed in different regions.

We know Democratic Republic of Congo dominates in terms of the offer for these minerals and South Africa.

And so what has happened is that jointly through the African Union, African countries have come up with a policy where they are pushing for at least 10% value addition of minerals to oppose the traditional model that used to be just getting rocks out of Africa and getting finished products back to the continent.

That's very interesting and that does touch upon my next point because of course, extraction is one thing, but

there's also huge potential for development within Africa, especially in terms of processing these minerals.

Are foreign investors supporting a shift towards local processing, or do you feel the focus is still on exporting raw materials?

At the moment, the focus is still largely on exporting raw materials, which has been the traditional pattern over 200 years.

It has always been take raw materials out of Africa.

A lot of infrastructure projects, Africa, be they railway lines, ports or highways, they were designed originally to simply extract raw materials from Africa.

But now there's a big shift, as I mentioned with that campaign, that at least 10% value addition happen in Africa.

And this is largely through some of the big energy projects that are already coming up.

We've seen, for example, Ethiopia came up with this huge energy project that is supposed to support energy infrastructure across the East Africa region.

So I think with the energy projects coming up, there's going to be more push to have value addition happening within the continent.

This of course involves a lot of Pan African cooperation.

Well, when it comes to minerals, it's quite tricky because first of all, there's always the connection between minerals and conflict.

You'll notice that many of the countries that are rich in natural resources tend to also be having lots of wars.

People fighting over the control of those minerals and some outsiders sponsor those conflicts for purposes of easier access to those minerals.

So that is a challenge that Africa is facing at the moment.

But there are models that are being tested out, especially we've seen with the Americans trying to put up what they call the Lopito corridor, where they're focusing on possibility for Zambia, for example, to have value add in their minerals before they are exported out.

But that's a rare case because it's still something that is yet even to take on.

You've also conducted some very interesting research looking specifically at the differences in how business leaders across Africa perceive European versus Chinese investment.

Well, basically, in terms of perception, I would say that first of all, in terms of data, before we go to perception, Europe is still the biggest trading partner of Africa and also the biggest investor in Africa.

We're looking at over 300 billion euros across, of course, the 54 nation states.

But when it comes to perception, you notice that when Europe invests in companies, it might not be as visible as when China invests in a port or invest in a railway infrastructure or a highway, because that's visible.

So then it creates a variety of perceptions.

The first being that the Chinese deliver on time and they deliver on infrastructure that can transform on Africa's aspiration.

But most of the European investment would be private related.

There will be companies maybe in food processing.

So it might not be associated to Europe as such, but more to the company.

So there's that aspect of perception in terms of how Africa views China and how Africa views Europe.

And then in terms of the general relationship, Europe is seen to be a region that interferes most in Africa's internal affairs by lecturing Africans to be democratic, to follow certain values.

But the Chinese are perceived to be not interested in terms of values.

They like to have a deal and deliver on the deal and ask for the next step.

When it comes to these tangible effects, Europe has been pursuing an investment strategy that it hopes will act as a counterweight to China's huge Belt and Road Infrastructure initiative.

Would you say it is succeeding in that Objective, I would say.

I think Europe has a big challenge as far as that initiative of trying to compete with China.

The first challenge being that European countries tend to gravitate around the countries that they colonized before.

So you get that like for Francophone, the French would wish to be more associated with the French former colonies, the British and so forth.

But the Chinese do not have that baggage of former colonies.

So when they have a strategy, their strategy covers the entire continent.

So that is a big challenge, for example, for the global gateway, because there's still those remnants of paternalism that we do a project to form a colony, while the Chinese do a project for the entire continent.

So there's that challenge in terms of implementation, which leads to smaller projects from Europe which are invisible and which then are challenged by the bigger projects from China, which are more visible and therefore creates that impression that China is doing more than Europe.

But when, in essence, the data will tell you that we still have a strong presence of Europe in Africa.

Now, the United States wasn't part of your research, but

it is, of course a big player when it comes to investment in Africa.

American foreign policy has become a little bit more transactional in the era of Trump.

Is this reflected in the nature of investments that American companies are pursuing?

Well, we can see a growing interest of American companies.

I mean, just the other day we saw one of the leading retail stores from the US opening up its activities in South Africa.

I would say a lot of American companies will find them operating from the southern part.

But there's still the challenge of how the American politics approaches Africa.

I mean, in terms of even pronouncements of American leaders, they see Africa as really a place of no consequence in terms of their strategy.

And that somehow has played into the Chinese strategy.

Because you notice when America, for example, stopped USAID program, just the other day, we saw China stepping in to finance the program for South Africa.

Whereas America is turning away from Africa and feeling that we are not very strategic, Asian countries and Gulf states are finding Africa to be a strategic place to go.

And of course, for Europe, we call them our own partners.

They are also trying to reinvent their engagement with Africa.

Now, Africa offers a whole lot of opportunities beyond natural resources as well.

It has a young and a growing consumer market.

For example, what kind of investment opportunities does that present for foreign businesses?

I mean, first of all, we have to look at the fact that when you're having a youthful population, these are energetic people, they want some Fresh ideas, some challenges that they can be able to solve.

So it's projected by the Africa Development bank that by the year 2030, Africa should be have a market of consumers, if I put it that way, of over US$2.5 trillion.

And that is an attractive aspect, especially when you look at digital related companies.

We've seen quite a number of some of these companies from the US now setting base here in Kenya, in Ghana, in South Africa, because they like to tap into this youthful population that would like to make use of this new gizmos, you know, AI and things like that.

The challenge of course is it's not coordinated in one city.

You're looking at 54 nation states with their varied aspirations.

So even as we say that by the year 2100 we'll have maybe over 4 billion Africans and 60% below 20 years of age.

Any investor has then to look at the realities by using what we call regional economic blocks.

The second aspect is to look at what you call nodal countries.

So for example, Kenya becomes a gateway for the East Africa region.

We've got Nigeria in the west, we've got South Africa in the south and so forth.

So the nodal entry points become the best way for any investor would like to tap into this growing consumer market in Africa.

Now this trend is happening as much of the rest of the world grapples with an aging population.

There is likely going to be huge competition for attracting African talent.

What do African leaders need to do to make sure that they keep these bright young people at home?