In a strategic move to bolster its economic standing and retain more value from its mineral wealth, Kenya has announced its decision to join other African nations in restricting the export of raw gold and minerals. This decision marks a significant step for the country, as it aims to strengthen its local mineral processing industry and secure a better share of the global market.
Elijah Mwangi, Kenya’s Principal Secretary for Mining, confirmed that the country is on track to complete the construction of its gold refining and granite processing plants by mid-2025. The gold refining facility, located in Kakamega, is part of a multibillion-shilling agreement between Kenya and private investors, while a granite processing plant valued at Sh2.5 billion is being built in Vihiga County. Upon completion, these plants will enable the country to export value-added gold, gemstones, and granite, rather than shipping them in raw form for processing abroad.
With this move, Kenya joins around 10 other African nations that have already imposed restrictions or tightened regulations on the export of raw minerals. Historically, the export of unrefined minerals from Africa has been viewed unfavorably due to the significant loss of potential revenue, as the continent’s resources are processed elsewhere, diminishing the economic benefits for the producing countries.
Industry experts have long advocated for Africa to develop its own processing capabilities, emphasizing the importance of retaining more value from its vast mineral reserves. According to a report by McKinsey, Africa could generate between $200 million and $2 billion annually by 2030, creating up to 3.8 million jobs through a competitive, low-carbon manufacturing sector. Africa holds a dominant share of global reserves of key minerals, including 92% of platinum, 56% of cobalt, and 36% of chromium, all of which are essential in green technologies like electric vehicle batteries and wind turbines.
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However, the continent continues to face challenges as much of its raw mineral output is refined abroad. For instance, gold exports from Africa to the United Arab Emirates (UAE) totaled $15.1 billion in 2016, a dramatic increase from $1.3 billion in 2006. Worryingly, Reuters reports that significant volumes of these exports lack official documentation, leading to large amounts of untaxed minerals leaving the continent, depriving African nations of valuable tax revenues.
Several African countries, including Ghana, Tanzania, and Nigeria, have implemented policies to promote local processing and restrict the export of raw minerals. These measures aim to foster local industries, create jobs, and enhance tax revenues. However, experts like Benedikt Sobotka, CEO of the Eurasian Resources Group (ERG), caution that while the intention behind such bans is noble, the implementation must be carefully managed to avoid economic setbacks. Many African nations have struggled to maintain such policies due to infrastructural challenges and high costs.
As Kenya takes this bold step, the country looks to leverage its rich mineral resources to drive economic growth and create sustainable development. However, the road ahead will require careful planning and investment in infrastructure to ensure that the benefits of these policies are fully realized.
