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Research Briefing | Mar 13, 2024

Global sustainability scramble ushers in a new era for South Africa

Africa’s mineral riches are central to its history. However, the race to combat climate change has reignited interest in the continent given its vast deposits of critical minerals. Southern Africa, in particular, has received much attention with the development of several key transport corridors with the almost explicit purpose of scaling up the availability of these minerals on international markets. We set out to investigate the economic potential of the region in terms of its critical minerals while taking into consideration what the establishment of these corridors means for the regional economy.

What you will learn:

  • Southern Africa’s economy has posted mediocre real GDP growth rates in recent years. This can largely be attributed to the poor performance of the South African economy, while recent logistical issues have promoted its regional counterparts to seek alternatives to South African ports. As a result, Botswana and Namibia are steaming ahead with the development of the Trans-Kalahari Railway. Elsewhere, the Lobito Corridor is being upgraded and expanded.
  • Apart from critical minerals, the region is also making moves to capitalise on the use of transition fuels to reduce carbon emissions. Here, the recent COP28 agreement has provided a window of opportunity. Both South Africa and Mozambique are making strides toward becoming key natural gas suppliers in the region, while Namibia is seeking to leapfrog onto the global green hydrogen stage.
  • Despite its failings, the South African economy should not be discarded too quickly. As the most industrialised economy in the region, South Africa still holds the potential to become a regional hub for manufacturing activities related to the global sustainability drive. More regional competitiveness may also prompt rapid policy reform. The expansion of transport networks, increased appetite for local intermediary value-adding activities, and South Africa’s industrial base may portend a more upbeat outlook for Southern Africa.
Tags: BotswanaCOP 28GDPGrowth RatesHydrogenLobito CorridorMinerals SectorNamibiaSouth AfricaSouthern AfricaTrans-Kalahari RailwayTransport corridors
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