BUA Group Chairman Alhaji Abdul Rabiu called on African governments and other stakeholders to urgently shift the continent’s economic model from raw material extraction to large-scale processing/industrial transformation.
Rabiu was speaking on Tuesday at the High Level Mining Forum held by the African Finance Corporation (AFC) in Cape Town, South Africa.
He praised the agency’s leadership in mobilizing long-term finance for the development of Africa’s industrial, mining and physical sectors.
He said the recent S&P Global Ratings positive outlook for Africa highlighted the importance of strong development finance institutions in shaping Africa’s growth trajectory.
He said it was drawn from BUA’s 16-year journey in mining and cement production, noting that Nigeria was once heavily dependent on cement imports despite possessing vast limestone deposits.
He said the challenge of constantly chasing currency to import cement has exposed the company to currency fluctuations and supply uncertainty over the years.
“Until BUA finally made the strategic decision to invest in local cement production based on Nigeria’s limestone resources, we spent more time chasing currency than selling cement.
“Currently, BUA mines and processes around 40,000 tons of limestone every day and produces around 1 million tons of cement every month.
“As a result, Nigeria has moved from being a net importer of cement to a net exporter, saving billions of dollars in foreign exchange annually,” he said.
BUA chiefs also said the transformation would not have been possible without patient funding from development financial institutions, particularly AFC, which has supported the company and other industrial operations with over $400 million in long-term financing.
He disclosed that a significant portion of the facility has already been paid off, demonstrating that well-planned industrial projects in Africa are developmental and financeable.
Rabiu highlighted what he described as Africa’s “structural paradox”, adding that while the continent is rich in resources, the majority of its mineral resources are exported in raw or minimally processed form.
He said gold, platinum group metals, cobalt, copper, iron ore and diamonds are mainly shipped abroad for processing, while African countries import finished products at significantly higher prices.
He said Nigeria spends between $3 billion and $4 billion annually on importing steel products, despite having more than 4 billion tonnes of iron ore.
“The same pattern exists in agriculture, where four African countries produce about 75 percent of the world’s cocoa, yet Africa captures only a fraction of the more than $200 billion global chocolate industry.
“Africa accounts for about 60 percent of the world’s arable land, yet continues to import billions of dollars worth of food every year.
“Africa does not lack resources, but it lacks processing capacity, industrial scale and strategic execution,” he stressed.
Mr Rabiu therefore called on development finance institutions to increase long-term financing for beneficiaries, industrial value chains and infrastructure.
He called on governments to adopt deliberate policies to incentivize local processing and curb raw exports where production capacity exists.
“Africa must move from extraction to transformation, from potential to productivity and from resource wealth to shared prosperity,” he added. (NAN)(www.nannews.ng)
Edited by Deborah Coker
