Africa's Resource Wealth Hinges on Governance, Say Leaders

Professor Bonang Mohale, Chancellor of the University of the Free State, told delegates at the recent One Young World Summit in Cape Town that Africa’s economic underperformance is not a function of scarce capital but of how power is exercised and how countries are managed. Economists and business leaders addressing the summit argued that the continent’s resource wealth will remain largely unrealised unless institutions, regulatory frameworks and governance systems are strengthened.

The accountability question sat at the centre of the discussion. Mohale argued that democracy itself must be judged by whether it creates mechanisms for citizens to hold leaders to account and to remove those who fail to serve them.

“This thing called democracy is not so much about electing good leaders as it is about putting a system in place to ensure that we are able to peacefully get rid of the not-so-good ones,” Mohale said.

He pointed to the scale of resources already available on the continent. In 2025, Africa’s combined nominal GDP stood at $4.367 trillion across 55 countries, while South Africa’s nominal GDP was $479 billion. He also cited the Public Investment Corporation, which he said held R3.7 trillion in assets under management. Johannesburg, with a nominal GDP of $135 billion, would rank as the seventh-largest economy in Africa if it were a country, larger than Kenya and Tanzania.

“Its economy is bigger than Kenya and Tanzania. But you wouldn’t say so. The way our leaders play with it like it is monopoly money,” Mohale said.

The implication, he argued, is that capital does not automatically flow to where it is most needed. “Capital does not go to where it’s most needed. It goes to where there are better systems. Capital loves speed.” Africa, he said, is not poor but poorly managed, because leadership is the highest form of management. He cited the Democratic Republic of Congo, which holds a substantial share of the world’s cobalt resources despite widespread poverty, as evidence of the gap between possessing valuable endowments and ensuring their benefits reach the wider population.

Meanwhile, Standard Bank chief economist Goolam Ballim framed the institutional argument within a shifting global economy. He told delegates that the world is moving away from three decades of efficiency-driven supply chains, during which two billion people joined the global workforce in what he called “The Great Doubling”, towards resilience and strategic autonomy as geopolitical tensions reshape trade relationships.

“Rather than efficiency and integration, the world is in pursuit of resilience. Nations are in pursuit of strategic autonomy,” Ballim said.

That shift could favour Africa, given its geography, natural resources and agricultural potential. The continent holds significant reserves of cobalt, platinum and lithium, minerals central to energy and advanced manufacturing, along with 60% of the world’s still-available arable land. Yet Africa accounts for roughly 18% of the global population while generating only between 3.5% and 4% of global GDP.

Ballim attributed this shortfall to missing substructures: electricity, skills, technology, regulation, the rule of law and policy-making. Much of the continent’s mineral wealth is extracted and exported with little local processing, meaning the profits and margins associated with value addition accrue elsewhere. The infrastructure deficit also extends to emerging industries, with Africa accounting for less than 1% of global activity in data warehousing, algorithmic development and artificial intelligence, while limited electricity availability constrains the development of more advanced sectors.

Fragmentation compounds these challenges, Ballim said, since many African economies are too small to achieve scale, making cross-border and regional cooperation essential. Further analysis of the debate is available at https://www.moneyweb.co.za/news/economy/africas-resources-need-better-leadership/.

Both speakers returned to the theme of institutional responsibility. Ballim urged young people to move from commentary to construction, saying they should “convert from being spectators to builders”, and stressed that institutions, the rule of law, good governance and accountability are fundamental to economic development. Mohale’s closing argument was blunter: the continent’s future depends less on what it owns than on how well those entrusted with governing it do their jobs. Whether Africa’s leaders can build the systems that capital trusts remains the open question the summit left unanswered.