Published in May 2017

Africa: Natural Resources Abudance Brings Opportunities for Industrialisation

Africa is richly endowed with metal and non - metal minerals, as well as energy resources, and many of its economies are highly resource - dependent. New discoveries of natural resources in previously non resource - abundant economies such as Ghana, Kenya, Mozambique, Tanzania and Uganda raise the prospect that an increasing number of African economies will enter the ranks of natural resource exporters.

This brings opportunities for industrialisation:

( 1 ) the financial inflows to finance the infrastructural and skills development req uirements of industrialisation ;

( 2 ) materials that could form the base for processing industries ; and

( 3 ) the opportunity to integrate domestic firms into the natural resource value chain as suppliers.

But natural resource abundance also poses a major challenge to industrialisation. It makes it more difficult to compete internationally in industries unrelated to the natural resource, unless the exchange rate and overall macroeconomic policy is managed carefully to keep the real exchange rate competitive. And, of course, measures that support productivity increases in the non - natural resource manufacturing sector, will also help.