Sub-Saharan Africa Natural Resource Deposits

Nov. 18, 2016 Sub-Sahara Africa’s natural resource deposits are a key feature that tie the region into mainstream geopolitics. Countries in the region have historically depended highly on export of raw materials, which fueled economic growth in industrialized economies.

This strong dependence on the sale of natural resources has also made many Sub-Sahara African countries very susceptible to the exporters’ crisis – both in terms of falling commodity prices and lower demand from major customers like China. Nigeria’s oil and gas sector accounts for about 35 percent of GDP, while hydrocarbons account for about 45 percent of Angola’s GDP. Oil and petrol account for 90-95 percent of exports in both countries. The price of other commodities, including gold, iron ore, platinum and copper, has remained low. Production of these materials figure prominently in the GDPs of South Africa, the Democratic Republic of the Congo (DRC), Zimbabwe, Zambia and Mozambique.

Weekly Graphic

|November 18, 2016


China’s slowing economy intensified the crisis for countries like Zambia, the DRC and Angola. Zambia’s trade relationship with China, its second largest partner, is based almost exclusively on copper – which is significant considering that all exports (almost two-thirds of which are copper by value) account for 39 percent of Zambia’s GDP. In the case of Angola and the DRC, China is their leading trade partner, accounting for nearly 50 percent of exports for each country.

However, one can find a bright spot in East African countries, particularly Ethiopia, Kenya, Uganda and Tanzania. The absence of large raw material deposits in these countries (compared to others in the region) forced the local economies to grow and generate revenue through other means. These countries also show relatively high growth rates and have large, low-wage working populations. The combination of these two factors make these countries attractive and promising locations for developing a basic manufacturing industry. To read more on the outlook for Sub-Saharan Africa and other regions, see our forecast for 2016.


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