The global transition towards clean energy has triggered an unprecedented demand for critical minerals such as lithium, cobalt, nickel and rare earth elements. These materials are fundamental in manufacturing batteries, wind turbines, and solar panels, essential components of a sustainable energy future. With vast deposits of these minerals, Africa stands at a strategic crossroads, poised to play a crucial role in the global energy transition. However, governance, transparency, and accountability challenges continue to threaten the continent’s ability to harness its resource wealth fully for sustainable development. The report “Critical Minerals and the Energy Transition: Governance, Transparency and Accountability in Africa,” produced for the Centre for Journalism Innovation and Development (CJID), examines the governance landscape of Africa’s critical minerals sector, focusing on Nigeria, Ghana and Mozambique. The study presents a detailed analysis of policy frameworks, regulatory mechanisms, and existing best practices while revealing significant gaps that hinder the sector’s transparency and economic viability.
The resource potential of Africa’s critical minerals
Africa is home to a wealth of critical minerals essential for the clean energy transition. Nigeria, Ghana and Mozambique hold substantial lithium, cobalt and manganese deposits, among others. But despite this potential, the continent continues to struggle with economic benefits from these resources due to governance challenges and a lack of investment in value-added industries. In most cases, these raw materials are extracted and exported with little to no local processing, depriving African nations of economic growth opportunities that come from refining and manufacturing. Ghana’s manganese sector provides a case in point. Despite being one of the largest global exporters of manganese ore, the country heavily depends on China as its primary trading partner. With limited investment in domestic processing, Ghana’s economic returns remain restricted. Similarly, Nigeria’s lithium reserves, concentrated in states such as Kwara, Nasarawa and Niger, offer significant opportunities for integration into global electric vehicle (EV) supply chains. Conversely, weak infrastructure, corruption and regulatory inconsistencies impede progress. Conversely, Mozambique is emerging as a major player in the lithium and graphite industry. The country has attracted international investment, but concerns over equitable benefit-sharing with local communities persist. Without transparent regulatory mechanisms, Africa’s mineral-rich nations risk perpetuating the long-standing “resource curse,” wherein natural resource wealth leads to economic disparity and environmental destruction rather than broad-based development.
Governance challenges in Africa’s critical minerals sector
Weak governance is one of the most significant obstacles to maximising the benefits of Africa’s mineral wealth. Similar governance failures emerge across Nigeria, Ghana and Mozambique, including corruption, poor regulatory enforcement, illicit financial flows and a lack of contract transparency. In Nigeria, the solid minerals sector contributes less than 1% to GDP despite the country’s vast reserves. Revenue leakages, illegal mining, and inefficient tax collection further exacerbate economic losses. Also, overlapping jurisdictional mandates between federal and state authorities create regulatory bottlenecks, making it easier for politically connected persons to secure mining rights while bypassing due process. Though better regulated than Nigeria’s, Ghana’s mining sector is plagued by a lack of transparency in contract issuance and revenue allocation. Reports indicate that politically connected persons often receive mining licenses without following proper procedures, leading to significant financial losses for the state.
The role of corruption in undermining the sector
Corruption remains a systemic issue within Africa’s critical minerals sector. Across all three case study countries, bribery, mispricing and under-invoicing result in billions of dollars in lost revenue annually. Nigeria, for instance, is estimated to lose $9 billion per year due to corruption in the extractive industries. Weak institutions, political interference and opaque contract negotiations allow these corrupt practices to persist. The licensing process is particularly vulnerable to corruption. Mining licenses are often issued based on political patronage rather than competitive bidding. This leads to inefficiencies and discourages legitimate investors from participating in the sector. In addition, illicit financial flows through smuggling and tax evasion significantly reduce the revenue available for national development projects. Environmental degradation is another byproduct of corruption in the sector. In lithium-rich regions of Nigeria and Ghana, illegal mining activities contribute to deforestation, soil erosion and water pollution. Regulatory agencies, often underfunded and poorly resourced, struggle to monitor compliance, while some officials turn a blind eye in exchange for bribes.
The need for stronger governance and transparency measures
If Africa is to capitalise on its critical mineral wealth fully, urgent reforms are needed in governance, regulatory oversight and industry transparency. Strengthening legal frameworks and ensuring strict enforcement mechanisms can create a more stable investment climate while reducing the prevalence of illicit financial flows. One proposed solution is to mandate the public disclosure of mining contracts and revenue reports. Countries like Botswana have successfully implemented transparency initiatives that allow for public scrutiny of resource management. By adopting similar models, Nigeria, Ghana, and Mozambique can improve investor confidence and ensure equitable revenue distribution.
Regional cooperation and strategic trade partnerships
Africa’s mineral-rich nations must also strengthen regional cooperation to negotiate fairer trade agreements. China exerts significant influence over the global supply of refined critical minerals, placing African countries at a disadvantage. By forming regional alliances, African nations can collectively advocate for better terms in mineral trade deals, ensuring they receive fair compensation for their resources. Engaging with global initiatives such as the Extractive Industries Transparency Initiative (EITI) can also enhance Africa’s reputation as a responsible mineral supplier. African governments can attract ethical investments by prioritising environmental sustainability and community development by committing to internationally recognised transparency standards.
Conclusion: A path forward for Africa’s critical minerals
Africa’s critical minerals present an unprecedented opportunity to drive economic transformation and sustainable development. But without addressing the governance and transparency challenges that plague the sector, the continent risks repeating past mistakes. By implementing robust regulatory reforms, combating corruption, and fostering regional cooperation, African nations can position themselves as leaders in the global energy transition. To ensure long-term sustainability, governments must prioritise local beneficiation, enforce strict environmental regulations and encourage responsible investment. The future of Africa’s mineral wealth lies not in exporting raw materials but in developing industries that harness these resources for domestic and regional growth. If managed effectively, Africa’s mineral wealth can catalyse economic diversification, social development, and energy security, shaping a more prosperous and sustainable future for the continent.
