Seizing the moment: How Africa can transform resource wealth into green economic power

This is the third of a four-part OP-ED series led by the Nelson Mandela School of Public Governance at the University of Cape Town, providing insights on the key themes being discussed by the world’s major economies in more than 140 major official meetings until the G20 Summit in November 2025.

Despite holding vast reserves of critical minerals, African economies remain largely dependent on exporting raw materials. If Africa does not act now, it risks becoming trapped in a new form of resource dependency — what some have called “green colonialism” — in which it is once again relegated to the role of a supplier of critical minerals transformed into finished products in industries located elsewhere.

However, the global trade landscape is shifting in ways that could potentially widen policy space available to support “green” industrialisation, greater value addition and job creation. The restrictive rules of the World Trade Organization (WTO) that once limited Africa’s industrial ambitions are being progressively disregarded and discarded. 

This began in the advanced economies of the Global North where competition from China in both digital and low carbon technologies has led both to the recovery of industrial policy tools, abandoned during the heyday of hyperglobalisation and neoliberalism, and “national security” justified measures designed to restrict and contain Chinese firms and technologies. 

Among key “climate justified” departures from World Trade Organization rules by the Global North are:

• The introduction under the United States’ Inflation Reduction Act of tax incentives for purchasers of electric vehicles with batteries produced in the US — later extended to batteries manufactured in any country with which the US has a Free Trade Agreement. This is incompatible with both the spirit and letter of the World Trade Organization’s Trade Related Investment Measures (which proscribes extending localisation measures to private purchases as well as to products from selected trade partners).


• The European Union (EU)’s Carbon Border Adjustment Mechanism, which will impose levies on top of tariffs on imports with a carbon content higher than that set for domestic producers under the EU’s cap and trade system, known as the European Trading System.

Will Africa seize this moment to drive green industrialisation?

• The Democratic Republic of the Congo (DRC) and Zambia have launched an EV battery special economic zone to encourage investment in battery manufacturing, beginning with manufacture of precursors inputs.


• South Africa’s Mintek has identified the potential to establish a 5,000MW lithium-ion battery manufacturing plant, leveraging the country’s own mineral resources.


• Platinum beneficiation initiatives in South Africa aim to support the development of hydrogen fuel cells as well as the manufacture of underground mining vehicles and small-scale power stations.

• Indonesian-style minimum beneficiation requirements for the export of critical minerals  and/or investment in processing obligations on critical mineral contracts. This is one of the major points of leverage Africa has to drive investments in beneficiation, which may well not occur without them.


• The introduction of localisation requirements for renewable energy equipment, and their extension along the lines of the precedent set by the Inflation Reduction Act to products from other members of the African Continental Free Trade Area. With an expected doubling of investments in electrical energy both to transition away from high carbon systems and fill the “energy gap”, it will be important to ensure that an increasing part of wind towers, solar equipment, fuel cells and fuel cell equipment are made on the continent and are not fully imported. By extending localisation beyond national states, the building of regional value chains, in this area as well as in other sectors like pharmaceuticals, and textiles, will be encouraged.


• Carbon Border Adjustment Mechanisms (if they survive the Trump administration’s “America First Trade Policy” review) will establish a precedent that climate-justified trade levies are now acceptable — even if they contradict World Trade Organization rules.

• Export taxes on unprocessed critical minerals, with revenue reinvested into local processing industries.


• A climate levy on imports from Carbon Border Adjustment Mechanism-implementing countries, using the funds to support grossly underfunded climate adaptation projects.

The time to act is now