Africa: Lack of processing capacity hurts Africa’s economy – Rabiu

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BUA Group Chairman, Abdul Samad Rabiu, has urged African governments, financiers and private sector leaders to urgently transform the continent’s economic model from raw resource extraction to large-scale processing and industrial transformation.

Speaking at a high-level mining forum held by the African Finance Corporation (AFC) in Cape Town, South Africa, Rabiu said the lack of processing plants to add value to mineral resources is killing the continent’s economy.

Drawing on BUA’s 16-year journey into cement mining and production, Rabiu narrated how Nigeria was previously highly dependent on cement imports despite having huge limestone deposits.

He described the challenge of constantly seeking foreign exchange to import cement, exposing the company to currency fluctuations and supply uncertainty.

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“We were spending more time chasing foreign exchange than selling cement,” he said, explaining that BUA eventually made a strategic decision to invest in local cement production anchored on Nigeria’s limestone resources.

Today, BUA extracts and processes approximately 40,000 tons of limestone per day, and produces about 1 million tons of cement per month. As a result, Nigeria went from being a net importer of cement to a net exporter, saving billions of dollars annually in foreign exchange.

He stressed that such a transformation would not have been possible without the patient capital of development finance institutions, especially the African Finance Corporation, which has supported BUA Cement and other industrial operations with more than $400 million in long-term financing.

He noted that a significant portion of the facility has already been repaid, demonstrating that well-organized African industrial projects are developmental and bankable.

Broadening the discussion to include the wider continent, Rabiu highlighted what he described as Africa’s “structural contradiction”.

While Africa is rich in resources, the majority of its mineral wealth is exported in raw or minimally processed form.

Gold, platinum group metals, cobalt, copper, iron ore and diamonds are largely shipped abroad for processing, while African countries import the finished products at much higher prices.

He pointed out that Nigeria spends between 3 billion and 4 billion dollars annually on importing steel products even though it contains more than four billion tons of iron ore.

He noted that the same pattern exists in agriculture. Four African countries produce about 75 percent of the world’s cocoa production, but Africa accounts for only a small portion of the global chocolate industry, which is worth more than $200 billion.