For Africa to thrive, it must strike a delicate balance between attracting foreign direct investment and protecting national interests. This has always been a challenge, especially in resource-rich economies where foreign companies dominate extraction, while African countries remain stuck in the role of raw material suppliers. The result? A continent that exports wealth in its natural state only to import it back as expensive finished goods.
But what if Africa flipped the script? What if, instead of merely exporting raw diamonds, gold, cocoa, or copper, the continent processed, refined, and manufactured its own products? That’s exactly what Botswana has been working towards through beneficiation, a policy that ensures more value is added locally before raw materials leave its borders.
Botswana’s journey toward beneficiation began with a shift in policy that challenged the old way of doing business. For years, the country exported rough diamonds while global corporations reaped the rewards of cutting, polishing, and selling them as finished products. That changed when the government, through a strategic agreement with De Beers, pushed for more diamonds to be processed within Botswana.
For example, the new diamond deal signed on the 25th of February includes the establishment of a diamond manufacturing facility, a grading laboratory, and a training institute—key infrastructure that would not only keep more wealth within Botswana but also create jobs and boost skills development and promote skills transfer.
This model has wider implications beyond Botswana. Across Africa, one of the biggest obstacles to intra-African trade is the continent’s heavy dependence on raw exports and expensive finished imports. While the AfCFTA is expected to eliminate trade barriers, simply removing tariffs is not enough. The real challenge lies in the fact that African nations are not trading enough processed goods with each other. Beneficiation can change that. If more African countries embraced this model, they would not only increase trade within the continent but also reduce their reliance on external markets.
One of the biggest concerns about AfCFTA has been its potential impact on government revenue.
Many Least Developed Countries depend on customs duties for income, and tariff reductions under AfCFTA could lead to immediate losses. But beneficiation offers a way to offset these losses. Instead of depending on tariffs, governments can generate revenue through corporate taxes, domestic industrial growth, and increased employment. In Botswana alone, by 2013, over 3,200 jobs had been created in the diamond cutting and polishing sector, with 94 percent of those employees contributing to tax revenue. Now, imagine if Africa expanded beneficiation across multiple industries—cocoa in Ghana, oil in Nigeria, copper in Zambia. The result would be a continent with stronger economies, sustainable jobs, and less reliance on external aid.
Another major roadblock to intra-African trade is weak infrastructure. Roads, ports, power supply, and logistics remain underdeveloped in many areas, making it costly and inefficient to trade across borders. Beneficiation policies can help address this by attracting investment in industrial and transport infrastructure. Botswana’s latest diamond agreement included investments in industrial facilities that not only benefit the diamond sector but also create a foundation for broader economic development. If other African nations followed suit, beneficiation-driven industrialization could incentivize better infrastructure, improved supply chains, and stronger trade networks across the continent.
Botswana’s approach to beneficiation also reflects its broader commitment to regional integration. Its Mineral Policy of 2022 is designed to align with regional integration goals by reducing reliance on raw exports, increasing local participation in the value chain, and promoting regional collaboration in the mining sector. These policies serve as a model for how other African countries can leverage AfCFTA not just as a trade agreement, but as a tool for industrialisation and economic independence.
For beneficiation to truly take off across Africa, a few key things must happen. First, strong legal frameworks need to be put in place to ensure that value addition is prioritised while still making foreign investors feel confident in long-term partnerships. Second, financing mechanisms must be developed, with institutions like Afreximbank supporting the growth of beneficiation industries. Third, intra-African supply chains must be strengthened so that raw materials processed in one country can be further developed and traded across the continent, rather than being exported overseas for refinement.
Botswana has shown that beneficiation is not just an ambitious idea—it is a practical and profitable policy that can drive economic growth, job creation, and regional trade. If Africa is serious about breaking the cycle of dependency and becoming a true player in global trade, beneficiation must be at the center of its strategy. The real question is: will African nations take the leap, or will they continue to sell their wealth to the highest bidder, only to buy it back at a premium? The future of African trade depends on the answer.
