The Missing Middle: Why Africa Struggles to Convert Endowment into Power, By Collins Nweke

In the inaugural edition of African Worldview, I argued that Africa must move from protection to positioning in a fragmenting world order. One proposition sat at the centre of that argument: possession is not power. Having cobalt is not the same thing as making batteries. Producing cocoa is not the same thing as making chocolate. Pumping crude oil is not equivalent to refining petroleum products, producing petrochemicals or controlling energy supply chains. Having a large population is not automatically demographic power. And receiving billions in diaspora remittances does not, by itself, constitute diaspora leverage. Between what a country has and what it can do with what it has lies the decisive variable. I describe that relationship this way:

Asset Endowment → Conversion Capacity → Performed Power.

Africa possesses extraordinary asset endowment. Its enduring weakness lies disproportionately in the second stage: conversion capacity. That is Africa’s missing middle. A thoughtful response to my inaugural column by Prof. Jude Osakwe brought this question sharply into focus. He accepted the case for value-chain development but posed the more difficult question: why does the value-capture problem happen in the first place? Is the obstacle expertise, debt leverage, elite capture, or something deeper? It is an important challenge because African policy discourse has long been rich in prescriptions. We know that Africa should negotiate better agreements. We know that commodities should be processed locally. We know that regional markets should be integrated. We know that technology transfer matters. The more uncomfortable question is this: if we have known these things for decades, why do we continue exporting so much value and importing it back at a premium?

The Paradox of Endowment

Africa’s problem is certainly not scarcity of strategic assets. From cobalt and copper in the Democratic Republic of Congo and Zambia, lithium in Zimbabwe, platinum-group metals in Southern Africa, bauxite in Guinea, petroleum and gas across Nigeria, Angola and Algeria, to cocoa in Côte d’Ivoire and Ghana, the continent sits on resources indispensable to the global economy. The energy transition has made this contradiction even more striking. The African Union’s Green Minerals Strategy explicitly recognises that the continent must move beyond raw mineral exports towards beneficiation, processing and integrated value chains. Yet recognising the destination and possessing the means to reach it are two different things.

The latest trade figures underline the structural problem. In 2025, more than three-quarters of Africa’s merchandise exports were primary goods. At the same time, the continent imported nearly four times as many manufactured goods as it exported. So Africa frequently occupies the two least advantageous ends of the same transaction: seller of relatively unprocessed inputs and buyer of higher-value finished products.

We export the cocoa and import chocolate. Export crude and import refined products. Export minerals required for sophisticated technologies and import much of the technology. The missing value in between does not disappear. It is captured somewhere else. And where value is captured, jobs, taxation, technological capability, intellectual property, industrial ecosystems and ultimately geopolitical influence tend to accumulate with it. This is why value addition is not merely an industrial-policy question. It is a power question. 

1. Negotiating Capacity: The First Conversion Failure

“Negotiate better deals” is sensible advice. But negotiations are only as strong as the institutions sitting behind the negotiators. Consider what may confront an African government across a negotiating table: multinational corporations with decades of sectoral experience; investment banks and specialist lawyers; geological and commodity intelligence; sophisticated tax planning; financial modelling; scenario analysis; and institutional memories that survive changes of chief executives and governments.

On the other side may sit a ministry with limited specialist capacity, constrained budgets and officials whose tenure in a particular portfolio is shorter than the commercial life of the agreement being negotiated. That is not simply a negotiating imbalance. It is an information asymmetry with fiscal consequences. Countries cannot consistently negotiate sophisticated mining, energy, infrastructure, digital or trade agreements without equally sophisticated permanent capacity. Africa therefore needs more than talented ministers and occasional foreign advisers. Governments need institutionalised negotiating capability: permanent multidisciplinary teams combining commercial lawyers, economists, engineers, tax specialists, financial modellers, trade experts and diplomats. The objective is not hostility towards foreign capital. Africa needs investment, technology and partnerships. The objective is something more elementary: competence across the table.

2. Debt Can Negotiate Before Governments Do

The second constraint is financial. A country negotiating while under severe fiscal pressure is not negotiating from the same position as one able to wait. When foreign exchange reserves are strained, debt service is rising, infrastructure is urgently required and governments need immediate revenues, tomorrow’s strategic value can easily be exchanged for today’s liquidity. This is where debt becomes more than a Ministry of Finance issue. It becomes part of foreign policy and economic diplomacy.

A government desperately needing financing may theoretically possess a valuable mineral deposit, port concession or infrastructure opportunity. But urgency changes bargaining power. The investor or creditor knows that time has different values on opposite sides of the table. The question therefore is not simply whether African countries own strategic assets. It is whether they possess enough fiscal room to negotiate those assets patiently. Strategic autonomy has a balance sheet.

3. Elite Capture and the Political Economy of the Short Term

We must also confront the question that African development discourse sometimes prefers to approach delicately. Not every failure to capture value results from insufficient expertise. Sometimes incentives are misaligned. A twenty-year industrial strategy may generate national value long after the political administration that initiated it has left office. A concession, signature bonus, commodity-backed loan or politically visible infrastructure project can produce immediate benefits.

This creates a dangerous mismatch between the time horizon of national transformation and the time horizon of political power. At its worst, the problem becomes elite capture: arrangements that may be rational for individuals or politically connected groups but suboptimal for the country. Institutions matter precisely because they make national strategy harder to subordinate to individual incentives. Transparent contracts, competitive procurement, parliamentary scrutiny, beneficial-ownership disclosure, independent regulators and professional civil services are therefore not bureaucratic luxuries. They are components of conversion capacity. Governance is part of the value chain.

4. The Industrial Ecosystem Problem

There is another temptation we should resist: believing that beneficiation can simply be decreed. A government can ban the export of a raw commodity tomorrow. That does not mean a competitive domestic processing industry will appear the day after. Manufacturing requires an ecosystem. Reliable electricity. Transport infrastructure. Ports. Skilled labour. Affordable finance. Technology. Standards. Certification. Predictable taxation. Efficient customs. Research capability. Supplier networks. Access to sufficiently large markets. Without these, mandatory local processing can merely make an African resource more expensive while encouraging investors to source alternatives elsewhere.

The World Bank recently put the issue in similarly practical terms: possessing a resource does not guarantee industrial power. A country also needs sufficient market leverage and a domestic ecosystem capable of producing competitively. This distinction matters. Africa should certainly demand more domestic value addition. But value addition must be engineered, not announced. The task is therefore to build competitive ecosystems around strategic resources rather than treating the mine, oil well or cocoa farm as an isolated asset.

5. Fifty-Four Negotiators, One Global Market

There is also a structural African problem. Individual countries often negotiate nationally while corporations strategise globally. A multinational investor can compare jurisdictions, tax regimes, infrastructure, labour costs and regulatory requirements across multiple countries. An individual African government may therefore fear that demanding substantially better terms will simply move investment across the border. This creates competition among African states precisely where cooperation could create leverage.

The African Continental Free Trade Area matters here for reasons extending beyond tariffs and trade volumes. Properly implemented, it can change the scale at which Africa bargains. Regional value chains can allow one country to supply minerals, another processing capacity, another specialised manufacturing, another logistics and another financial services. Not every African country needs to manufacture a complete electric vehicle. But Africa should be asking a different question: how much of the electric-vehicle value chain can economically remain in Africa? That change of scale is fundamental. The relevant unit of industrial strategy cannot always be the nation-state. Sometimes it must be the region or continent.

From Local Content to Local Capability

This also requires a rethink of what Africa means by “local content.” Too often, local-content requirements are measured by percentages: how many citizens are employed, how much procurement is domestic, how much equity is locally held. These indicators matter. But they do not necessarily tell us whether capability is being transferred. A country can achieve respectable local-employment figures while the engineering, patents, financing, technology, management systems and high-value decision-making remain elsewhere. The more ambitious question is therefore not simply: How much local content does this investment contain? It is: What will Africans know how to do after twenty years of this investment that they cannot do today? That shifts policy from local participation to local capability accumulation.

Technology transfer, supplier development, vocational education, research partnerships, managerial progression and domestic access to finance should become measurable components of strategic investment agreements. The ultimate objective of economic diplomacy should not be permanent dependency on the investor. It should be progressively greater African competence.

The Diaspora as Conversion Infrastructure

There is another resource Africa systematically underutilises in solving the missing-middle problem: its diaspora. The conventional discussion measures diaspora contribution largely through remittances. But money sent home for household consumption, valuable as it is, represents only one dimension of diaspora capital. Across finance, law, engineering, medicine, technology, academia, international institutions and corporate leadership are Africans who already operate inside the systems with which African governments must negotiate. They understand foreign regulatory environments. They know capital markets. They work inside technology ecosystems. They understand how investment decisions are made.

Properly organised, diaspora expertise could form part of Africa’s permanent negotiating and industrial intelligence infrastructure. This requires moving beyond ceremonial diaspora engagement towards structured mobilisation of competence. A country preparing a major lithium agreement should be able to identify its nationals worldwide with expertise in mining finance, battery technology, international taxation, environmental regulation and contract law. That is diaspora policy as state capacity. And it is one of the clearest examples of converting an existing African asset into performed power.

Building the Missing Middle

What, then, should Africa do differently? The answer is not another continental declaration proclaiming the importance of value addition. Africa already possesses sophisticated policy frameworks, including the African Mining Vision, the African Commodities Strategy, the Green Minerals Strategy and the AfCFTA.

The challenge is implementation architecture. Every major strategic asset should be accompanied by a conversion strategy answering at least five questions: What part of the value chain can competitively be located domestically or regionally? What infrastructure and skills are missing? What technology and knowledge transfer should be negotiated? What financing structure gives the state sufficient patience and bargaining room? And what measurable national capability should exist at the end of the agreement that did not exist at its beginning?

These questions would change the measurement of economic diplomacy. Success would no longer be announced simply by the dollar value of an investment agreement signed. We would ask instead: What productive capacity has been created? What skills have been transferred? What domestic firms have entered the supply chain? What export sophistication has resulted? What strategic dependence has been reduced? In other words, we would measure not activity, but conversion.

From What Africa Has to What Africa Can Do

There is encouraging movement. The African Union’s Green Minerals Strategy now explicitly calls for value addition at source and integrated African value chains. International development institutions are increasingly talking about moving from critical-mineral extraction into processing and manufacturing. But Africa should recognise something important about this moment. The global scramble for critical minerals is not an act of generosity towards the continent. It is a window created by other countries’ strategic needs.

Windows close. Technologies change. Battery chemistry evolves. Alternative suppliers emerge. Recycling expands. Strategic priorities shift. Resource advantage is therefore temporary unless converted into capability. Africa’s deepest development challenge may consequently not be that it lacks assets, opportunities or even policy ideas. It is that too much gets lost in the space between them and outcomes. That space is where negotiating weakness matters. Where debt pressure, elite incentives, electricity and infrastructure, skills and technology, fragmented markets, and institutions matter.  That is the missing middle. And until Africa strengthens it, the continent may continue possessing resources the world considers strategic without possessing corresponding strategic power.

Endowment creates possibility; conversion creates power. The task before Africa is to build the institutions, productive capabilities and negotiating leverage that connect the two. This is because in the world now taking shape, what a country possesses matters. But what it can do with what it possesses will matter much more.

Note:

The last of this trilogy: The Price of Multi-Alignment will interrogate what happens when Africa has to choose.

A Podcast of this essay is available below: