Africa’s age long challenge of poverty is still far from over though the continent has embraced the value addition and beneficiation developmental concept.
Value addition and beneficiation entail the local processing of abundant raw materials in a country.
Since the concept of value addition and beneficiation started to take ground on the African continent a few years after the disastrous tenure of the structural adjustment programs, African countries have warmly embraced it. Countries like Botswana, Kenya, Nigeria, South Africa and Zambia have already drafted and are implementing value addition and beneficiation strategies.
The importance of value addition and beneficiation is comparable to none.
Value addition and beneficiation have the potential of unlocking economic growth and development while at the same time opening up a channel for employment for thousands of people in a nation.
As the importance of value addition and beneficiation is such a crucial factor to economic development, the whole of Africa needs to fully implement this strategy so that the continent becomes self-sustainable and move away from its basket case.
Africa is still struggling to effectively incorporate value addition and beneficiation strategy in its economic agenda and below we are going to look at the obstacles which are hindering this and how they can be combated.
The biggest challenge that African governments are facing when it comes to wholly implementing value addition and beneficiation across all economic sectors is down to contractual obligations.
Most of the African raw material producers in sectors such as mining have long term contracts with clients in the East and Western countries which inhibit them from implementing new strategies.
Most of Africa’s mining companies have contracts which only allow them to sell their semi processed produce to a single client and any deviation from these contracts will attract negativity and often times heavy fines.
Due to such ‘unfavorable’ contractual agreements, there is a need for the African producers and governments to convene meetings with their foreign counterparts and seek renegotiations so that they are able to realize better rewards from their resources.
Another problem which may also be attributed to the power of east and western powers at the negotiation table is in relation to pricing.
A close analysis of commodity pricing reveals that pricing is skewed in favor of foreign powers. International commodity pricing does not discount proximity to the producer hence even after processing her own materials, Africa’s products still find it difficult to compete with other products.
There is need to ensure Africa gets a bigger say in terms of international trade.
Africa’s challenges when it comes to value addition and beneficiation do not solely lie on her inferior status in relation to foreign powers but it is partly down to her own failures and inadequacies.
In order to reap the huge rewards that value addition and beneficiation brings, a country has to invest heavily. Value addition and beneficiation is an expensive strategy at the initial hurdles and Africa has been found wanting when it comes to infrastructure development and machinery.
The continent is failing to source and constructs the crucial infrastructure needed to make this strategy a success. Only after the continent adopts a more proactive approach and avails the much needed infrastructure, can the continent realize value added benefits and move beyond its current predicament.
For value addition and beneficiation to bear any fruits, research and development have to be prioritized.
Though many African countries are making huge strides to encourage research and development, the continent still lags far behind other continents.
Research and development encourage innovation, one factor which is crucial to value addition and beneficiation.
There is need to encourage and promote research and development through incentives so the continent can start to develop its own technologies which will aid African value addition and beneficiation.
There is also need for African countries to invest heavily in human capital.
Addressing the high costs of utilities will go a long way in ensuring the continent benefits immensely from value addition and beneficiation.
The African continent has been plagued by ridiculously high utility costs such as energy which has a negative bearing on production.
Africa needs to encourage small to medium industries to venture into the sectors generally reserved for large corporations so as to stimulate competitiveness that stimulates growth.
The emergence of Independent Power Producers in countries like the Congo, Mozambique, and Zimbabwe is a welcomed development which will go a long way in easing power problems.
Additionally, value addition and beneficiation can only bear fruits if countries move to implement this as stand-alone strategies.
Countries such as Botswana, Kenya, Tanzania, South Africa and Zambia have implemented value addition and beneficiation as stand-alone strategies and are reveling in its succes