Alhaji Abdul Rabiu, Chairman, BUA Group, has called on African governments and other stakeholders to urgently shift the continent’s economic model from raw materials extraction to large-scale processing/industrial transformation.
Rabiu spoke on Tuesday at high-level mining forum convened by the Africa Finance Corporation (AFC), in Cape Town, South Africa.
He commended the institution for its leadership in mobilising long-term capital for Africa’s industrial, mining and real sector development.
He said the recent S&P Global rating with a positive outlook of Africa had reinforced the importance of strong development finance institutions in shaping Africa’s growth trajectory.
According to him, drawing from BUA’s 16-year journey in mining and cement production, Nigeria once depended heavily on cement imports in spite of possessing vast limestone deposits.
He said the challenge of constantly chasing foreign exchange to import cement had over the years exposed the company to currency volatility and supply uncertainties.
“We were spending more time chasing FX than selling cement before BUA eventually made the strategic decision to invest in local cement production anchored on Nigeria’s limestone resources.
“Today, BUA mines and processes approximately 40,000 tonnes of limestone daily, producing about one million tonnes of cement monthly.
“As a result, Nigeria has transitioned from being a net importer of cement to a net exporter, saving billions of dollars annually in foreign exchange,” he said.
The BUA boss also said that the transformation would not have been possible without patient capital from development finance institutions, particularly AFC, which had supported the company and other industrial operations with over 400 million dollars in long-term financing.
He revealed that a substantial portion of the facility had already been repaid, demonstrating that well-structured African industrial projects were both developmental and bankable.
Rabiu highlighted what he described as Africa’s “structural paradox” adding that while the continent was rich in resources, majority of its mineral wealth was exported in raw or minimally processed form.
According to him, gold, platinum group metals, cobalt, copper, iron ore and diamonds are largely shipped abroad for processing, while African nations import finished products at significantly higher prices.
He said Nigeria spends between three and four billion dollars annually to import steel products in spite of sitting on over four billion tonnes of iron ore.
“The same pattern exists in agriculture where four African countries produce about 75 per cent of the world’s cocoa, yet Africa captures only a fraction of the more than 200 billion dollars global chocolate industry.
“Africa holds about 60 per cent of the world’s arable land but continues to import billions of dollars’ worth of food annually.
“Africa does not lack resources, but lacks processing capacity, industrial scale and strategic execution,” he emphasised.
Rabiu therefore called on development finance institutions to scale up long-term financing for beneficiation, industrial value chains and infrastructure.
He urged governments to adopt deliberate policies that provides incentives for local processing and discourage raw exports where capacity exists.
“Africa must move from extraction to transformation, from potential to productivity, and from resource wealth to shared prosperity,” he added.
