Africa must turn trust and critical minerals into factories, jobs and lasting growth

The answer, according to economists and investment thinkers, lies not in the absence of opportunity, but in the continent’s failure to convert that opportunity into productive capacity.

For Goolam Ballim, chief economist and head of research at Standard Bank Group, the moment is not merely another emerging-market sales pitch. It is a rupture in the global order that may place Africa closer to the centre of the world’s next economic map.

“The world is not going through a transition, it’s a rupture,” Ballim told attendees at a Standard Bank business breakfast at Enlit Africa, arguing that the rules, institutions and assumptions that governed the post-World War 2 order are being replaced by power, coercion and the weaponisation of economic instruments.

That rupture is forcing governments and companies to rethink the global supply chains that were built for efficiency, rather than resilience. For the past 30 years, globalisation was organised around just-in-time delivery. Now, Ballim said, the world is shifting to “just in case” thinking, where reliability, continuity and commercial trust matter as much as price.

“Commercial trust is resurrecting itself as being an anchor concern for corporates and governments around the world,” he said.

In Ballim’s words: “I suspect what the world is now going through is not deglobalisation, but it is being forged under the umbrella of what we call two things: curated blocs, blocs where friend‑shoring, ally‑shoring, reshoring is going to be framed around trust, commercial trust.”

The geographical path of prosperity

Standard Bank’s own thesis is built around what Ballim called a “geographical path of prosperity”: Africa, the Middle East and the Far East. The Far East remains the world’s fastest-growing region; the Middle East is becoming a “superpower in terms of liquidity and potential trade”; and Africa carries the combination of resources, demographics and untapped production capacity that the next phase of global growth will need.

Ballim pointed out capital flowing from the Middle East into Africa in 2022 and 2023 was three times that from China, while Middle East-Africa trade now surpasses US-Africa trade. In other words, the continent’s next growth chapter may depend less on nostalgic attachment to old Western trade routes and more on building new corridors of finance, energy, logistics and manufacturing.

But the window is not guaranteed.

Ballim says that over a 10 year horizon, Standard Bank sees Africa growing at 4% to 5% with East Africa as the growth engine, growing between 6% and 7%.

“We think West Africa will perform slightly lower at 4 to 5%. The entrepreneurial opportunity and the possibility of scale is its comparative advantage, and South Africa will still be the slowest growing, because SA is stuck between, say, 2% to 3% at best,” he says.

The opportunity is clearest in critical minerals. Southern Africa, in particular, has what Ballim called “optionality value” in a fragmented geopolitical world because of its role in the energy transition, critical minerals and the search by global powers for more neutral manufacturing locations.

Yet this is precisely where Africa’s old weakness reappears. The continent has often supplied the minerals, but not captured the value.

The huge potential on the continent

At a separate Batseta Council of Retirement Funds for South Africa webinar on G20 Aspirations: Africa as a Hub for Driving Growth and Boosting Participation, the argument was put starkly: Africa has grown before, but it has not transformed.

Mpho Molopyane, chief economist at Alexforbes, pointed out that there was research that showed that by 2050 Africa’s working-age population will constitute about 25% of the global work labour force, while the continent holds about 30% of global mineral reserves, and through that growth there will be an expansion of a middle class.

“There were estimates showing that by 2030 Africa’s middle class would increase by about 42% to reach 500 million, lifting household consumption and also creating demand for housing, education and financial services,” she said.

However, manufacturing value added as a share of GDP has gone backwards in sub-Saharan Africa. The result is that Africa’s population share is rising, but its share of global production remains tiny. That gap between people and production is the continent’s central development problem.

The need for industrialisation

The uncomfortable implication is that macroeconomic stability alone is not enough. Sandile Malinga, Chief Investment Officer Multi-Asset at M&G Investments argued that for decades policy advice to African countries focused heavily on fiscal consolidation, inflation control and revenue mobilisation, while industrial policy and production strategy received far less attention. Advanced economies, meanwhile, have been rolling out their own industrial policies, from green deals to semiconductor strategies.

“It doesn’t happen by accident,” Malinga said of industrialisation. “You need concerted industrial policy to guide and provide the necessary frameworks.”

SA has its own proof point. The opening up of the electricity sector, particularly through reforms that allowed larger private power generation projects, showed that regulation was the binding constraint, and not capital. Once the constraints eased, private energy investment began to move.

The same lesson applies to infrastructure. Africa’s annual infrastructure requirement is estimated at between $130-billion and $170-billion, with an annual funding gap of about $68-billion to $100-billion. Bridging that gap could add about two percentage points to GDP growth, according to the presentation.

Yet the continent’s own capital is often parked too passively. Pension funds across Africa hold roughly $455-billion in assets, but only a small share is directed towards private markets and infrastructure. Much of it remains locked in government securities, funding recurrent expenditure rather than new productive capacity.

That is the paradox: Africa has the need, the savings pool and the demographic urgency, but not yet enough bankable projects, regulatory certainty or risk-sharing architecture to move capital at scale.

The trust advantage

The trust question therefore runs through everything.

Bruce Whitfield, speaking separately at the Standard Bank business breakfast on “the trust advantage”, argued that trust is the invisible infrastructure of modern economies. People board aircraft, eat conference food, use banks and cross roads because complex systems mostly work. But when trust breaks, investment, decision-making and social confidence begin to fray.

In SA, that erosion is visible in public services, policing, corruption, infrastructure and the ability of the state to deliver. For investors, the issue is not merely political noise. It is whether capital can trust the rules, the institutions, the logistics networks, the power supply and the policy direction.

Ballim’s view is that banks and other financial institutions cannot remain mere intermediaries in such an environment. They must become enablers.

“As a bank, what we want to do is lean in with regulators,” he said. “We want to lean in with respect to industry participants… We want to be part of the dialogue, we want to be part of industry-leading thinking.”

That may sound soft, but it is hard economics. Without trust, supply chains are unlikely to relocate, pension funds will not commit to infrastructure, manufacturers won’t build factories and global partners won’t sign long-term offtake agreements. And critical minerals will remain under-processed.

Africa’s challenge is no longer to prove that it has potential, but to turn minerals into manufactured goods, savings into infrastructure, demographics into skills, and geopolitical flux into negotiating power.

The next decade may indeed belong to Africa. But only if the continent stops being merely a source of what the world needs, and starts becoming a place where the world can reliably produce, invest and build. DM