Afreximbank seeks Islamic Development Bank’s alliance to grow mineral wealth in Africa

Afreximbank has called on Jeddah-based Islamic Development Bank (IsDB) to shift more investment focus to Africa’s mining sector as part of efforts to create value.

IsDB has a long, robust relationship with Africa, with Libya and Egypt among the league of countries that agreed in 1974 to start the organisation.

Today, Libya and Nigeria rank among its top five member nations in terms of shareholding size.

The scale of the transactions IsDB has done with Africa through International Islamic Trade Finance, which provides trade support to participating countries on behalf of the bank, has surpassed one billion dollars, Benedict Oramah, president of Afreximbank, said in Riyadh, Saudi Arabia on Sunday at a conference marking the bank’s half a century in business.

Afreximbank itself lends to support developmental initiatives and projects with Africa as its focus.

“Today there can be no better place to invest than in Africa. That is the continent of the future. That is the youngest population. That is a continent that will in a very very short time actually account for almost 40 per cent of global population,” the Afreximbank chief said.

“It’s a continent that has all the minerals you can think of that are yet to be exploited, not to talk of the water, agricultural land, all the things that the world today is lacking. So that is a place that can become a good partner of Saudi Arabia as it implements the Vision 2030.”

Saudi Arabia, one of the latest economies to join the scramble for Africa’s mineral wealth, dominated by China and the US, in the world’s quest to harness the critical metals required for a green energy transition, this year announced a $15 billion plan to scale supply.

A huge slice of that is expected to go into tapping cobalt, graphite, lithium, nickel and manganese in East Africa.

Scramble for Africa

Africa holds vast quantities of the minerals the world is looking to for the mass manufacturing of car batteries and components central to the shift to renewable energy sources for automobiles from reliance on fossil fuels.

That has returned only little socio-economic value following years of underinvestment, which has seen foreign mining companies ship the continent’s minerals largely in their raw state overseas without processing or adding much value.

Resource-rich Democratic Republic of Congo, one notable example, has mineral reserves worth $24 Trillion, according to the United States Agency for International Development, but ranks among the poorest nations on the earth.

Countries like Zambia and Nigeria, Africa’s economic powerhouse and most populous country, are insisting that investors add layers of value to minerals before they can be exported.

Mr Oramah told panellists and participants at the private sector forum of the IsDB’s annual meetings that Saudi Arabia’s Vision 2030, anchored on socio-economic and cultural diversification, has become a hub for Asia, Europe and Africa to connect.

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“If Saudi Arabia achieves this vision, so the global market is nearer, the African ports will become integrated into the Saudi ports, we are able to more effectively also diversify from mineral resources just as Saudi Arabia also diversifies from oil,” he said.

This February, the United States said it would back the project linking the Democratic Republic of Congo and Zambia through rail to the Lobito Port in Angola with more funding as it creates a corridor for itself to ease mineral importation.

China is bankrolling the construction of a parallel 1,860-kilometre rail line between Zambia and Tanzania, where it is positioning the port of Dar es Salaam as a key hub for importing minerals out of the continent.

On Saturday, the first day of the golden jubilee event, Côte d’Ivoire landed a €70.5 million deal to fund a project aimed at the development of root & tuber and regional cassava value chains. Another project of the same nature, but valued at €60.6 million, was approved in favour of the Republic of Benin.

Of IsDB’s membership, Africa accounts for 25 of the 57 countries spread across four continents that also include Asia, Europe and South America. Saudi Arabia is the biggest member of IsDB, holding nearly a quarter of the paid-up capital.