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🔵Policy Induction: What Is the U.S. Strategy in Africa?🔵 Explaining What State Department Officials Couldn’t [ Policy Review ] Since the head of the Bureau of African Affairs left gaps in his explanation, I’ve gathered the facts from the past few months to reconstruct the U.S. strategy on African minerals myself. Note: since I’m not an expert on visas, humanitarian aid and military operations, I won’t touch on those. So, what do the facts say about the U.S. strategy for economic expansion? 1️⃣The U.S. has adopted China’s model of state-backed business expansion. For a long time, Americans shied away from ambitious projects due to risks—something Chinese miners never worried about, relying on government loans and diplomacy. Now, the U.S. is using the US Development Finance Corporation (DFC) and the Export-Import Bank to push its own projects. 2️⃣Washington isn’t leading—it’s picking from proposals by private partners and local elites. Almost all US-backed economic expansion currently revolves around the DRC, but this is largely thanks to Félix Tshisekedi, who invited the Americans himself. In other cases, the U.S. operates on a grant basis: a private firm comes forward, promises to build supply chains without China, and gets loan support. 🗺 This also explains why regional and country priorities still haven’t been set: specific opportunities come and go, and Washington doesn’t yet have its own clear preferences. 3️⃣The US is entering both ends of the supply chain: mining and mineral processing. The US has secured copper supply deals with the DRC and launched Project Vault to redirect ore exports from other countries to itself. This matters because, until now, any purchase of a mine was complicated by the fact that intermediate processing plants were only in China. Now, for the first time in decades, the US is opening new processing facilities at home. 4️⃣Finally, US economic interests don’t always align with military or political ones. For example, there’s no clear articulation of US intent to re-enter the oil sector or pursue minerals in Nigeria, even though that’s where American troops are most active. 💡 All of this suggests that, at this stage, the U.S. strategy is inductive — moving from specific cases to general policy, testing individual countries and projects, and later declaring the most successful ones as priorities. This is just the warm-up. It’s easy to imagine that in the coming years, the U.S. will grow bolder, moving beyond Congolese copper—perhaps toward Nigerian lithium or something more marginal on the periodic table in East Africa. #PolicyReview ➡️ Stay informed - @devilsbelow

ℹ️What Is the "Presource Curse"? [ Policy Review ] 🧭 In 2010–2011 major gas discoveries in the Rovuma Basin turned Mozambique into a future LNG giant and politicians began to loudly promise investments in tourism, security, and infrastructure at every corner. Surprisingly, these were not empty words — the local elites did refrain from looting all the gas on the spot. ▶️Instead, they managed to demonstrate their incompetence in a more inventive way, illustrating an exotic concept known as the “presource curse.” Many have heard of the resource curse: revenues from extraction make the development of the rest of the economy unattractive, resulting in dependence on global prices, freezing the growth of living standards. But there are situations where the mere expectation of high revenues has an already disastrous effect. This is exactly what happened to Mozambique in the early 2010s. ▶️In Mozambique, anticipating future gas income from Cabo Delgado, a group of officials from the Intelligence and Security Service (SISE) and the Ministry of Defence decided to set up 3 shell companies — the Mozambican Tuna Company (EMATUM), Mozambique Asset Management (MAM), and ProIndicus — which were officially supposed to engage in fishing and coastal security. 🌫 In reality, they existed only on paper and were used for corruption. In 2013–2014, the three companies colluded with representatives of the Swiss bank Credit Suisse and raised around $2 billion under state guarantees. The officials behind these companies thought they could siphon off the money and repay the debts later — once gas from Rovuma made the services of their companies attractive to foreign investors. Instead, the scheme was exposed far earlier than planned—in 2016—triggering an investor exodus, the suspension of foreign aid, and a rupture in Mozambique’s cooperation with the IMF. Gas production, originally planned for 2019, was postponed because of the inability to secure new financing after the scandal. 🌐 But there is more to the "presource curse" than Mozambique. The same tendency — focusing on the future resource revenues after major discoveries — could also be seen in the 2000s and 2010s in Uganda and Ghana with their promising oil finds, as well as in other countries. #PolicyReview Independent, Honest, Yours - @devilsbelow

Where Are Geopolitics? 🇲🇼 Though Malawi does nothing special, it's a nightmare for mining companies. Yet another "investor" has announced delays to its project in Malawi — this time, it is a niobium venture, now not expected to kick off before 2028. Despite the presence of rare minerals and absence of competition, the premature demise of loudly announced projects is a Malawi classic. ❓ But why is that? Why do the international "investors" which are usually ready to kill each other for assets and which move thousands of tons of soil in neighboring countries do so bad in Malawi? ⏩ Malawi does have resources, but it has almost none of the “traditional” ones like oil or gold. So, companies usually go for something rarer. Over just the past few months, there have been announcements about uranium, rutile, and now niobium projects in the country. ⏩ Whenever deposits of yet another element from the depths of the periodic table are discovered, another British or Australian company spawns on the doorstep of the Malawian government, full of ambition to build a "China-free" supply of this unquestionably-useful-element-of-the-future. Very quickly, however, it becomes clear that while the foreigners have plenty of ambition, they have very little money. ⏩The financing problem in turn exists because the hypothetical guys on Wall Street cannot quite grasp why they should mine the unquestionably-useful-element-of-the-future in Malawi when there are countries with established production and the infrastructure. And what is niobium anyway?... 🔽 As a result, Malawi turns into a place of endless tragedy for companies that get licenses, loudly announce grand plans, and then sit on those licenses, waiting for some international bank to come and finance their plans. #PolicyReview ➡️ Follow to stay informed - @devilsbelow

South Africa Is a Unique Country [ Policy Review ] 🇿🇦What sets South Africa apart from the rest of Africa? 🚩 South Africa is unique not only because there is only one South Africa in the world. There is a second factor as well. Like many African countries, South Africa today mainly exports raw minerals abroad — but for SA this was not always the case. ⚙️ Until the 2010s, South Africa had its own strong mineral processing industry, especially in metals. With large metal deposits, the country built its own plants and exported not raw materials but refined metal products. 📉 However, from the 2010s onward, South Africa has ironically begun to slide back toward the all-African norm, as deindustrialization set in. The chart shows how, starting in 2009, exports of metal ores steadily caught up with exports of refined metals, and from 2017 onward, raw material exports permanently exceeded exports of processed products. This situation resulted from several factors. ⏩ First, there was rapid expansion of processing capacity in China and other Asian countries with cheaper labor than in South Africa. South Africa found itself in the so-called “middle-income trap,” where further investment is constrained by relatively high wage levels. ⏩ Second, currency. In the 2010s, the rand depreciated several times, making exports more profitable than domestic processing. Exports made more rand per tonne of ore, while wages and local expenses remained the same. ⏩ Finally, electricity issues. Electricity is a key input for metallurgy. In the 2010s, the state-owned utility Eskom repeatedlyraised tariffs at double-digit rates following years of lack of investment in new generation capacity in the 2000s. 🔽 As a result, SA now finds itself in a paradoxical situation. A country that 20 years ago would not lament exploitation and resource extraction is now turning into a kind of raw material appendage for China’s processing industry. #PolicyReview ➡️ Follow to stay informed - @devilsbelow

Switzerland and Foreign Bribery [ Policy Review ] "Corruption is only bad if I am not involved" 🇨🇭 The image of Switzerland has always been double-sided: on one hand, the country is associated with banking, precision, and reliability — on the other, it has long been a haven for murky, two-faced deals and moral flexibility. 📄 Historically, many global commodity traders have been registered in Switzerland: Trafigura, Glencore, Vitol, Gunvor, and others. We have already written about Glencore and Trafigura who bribed officials in the DRC and Angola. But these cases only stand out in terms of publicity — offering bribes for market access is, in practice, a routine part of the Swiss trading model. 💵 It is enough to note that until 2001, bribes were officially a legitimate basis for tax deductions in Switzerland — the country was called a tax haven for a reason. After 2001, “facilitation fees,” as company accountants labeled them, were banned only if they involved public officials. If it involved a private person, the tax deduction remained legal all the way until 2022. ⛓️ While many developed countries began criminalizing foreign bribery in the late 1970s, Switzerland was unwilling to give up its competitive advantage — extremely permissive legislation. Only in 2000–2001, due to OECD obligations, did the country introduce corresponding criminal and administrative liabilities. 🍫 Even then, the alpine chocolate lovers were in no hurry. The first case in which a company was sanctioned came only in 2011. The first case holding individual managers criminally liable arrived much later — in 2025, linked to Trafigura’s bribes in Angola. 💲 Remarkably, Switzerland profits both from corruption and from fighting it. From 2011 to 2024, Swiss courts closed 14 cases, collecting around $945 million (fines + illicit profits). But unlike for instance the United States, Switzerland does not return these funds to the countries harmed by the corruption. A remarkable ability to find profit everywhere — whether by allowing companies to bribe officials abroad or by charging them for doing so. #PolicyReview Devils Below

👋 China. Go Out. How China’s policy of encouraging overseas investment created lunar landscapes across Africa 🌍 In the 1990s, China launched its “Go Out” policy, encouraging state-owned and private entities to expand abroad in search of resources and investment opportunities. One of the main drivers was the need to secure mineral supplies at low prices to sustain a slowing domestic economy. “We need to implement a ‘going outside’ strategy, encouraging enterprises with comparative advantages to make investments abroad, to establish processing operations, to exploit foreign resources with local partners, to contract for international engineering projects, and to increase the export of labor.” — Zhu Rongji, Premier of the State Council Report to the National People’s Congress, 2001 👥 Alongside state companies, thousands of ordinary fortune-seekers from also headed overseas, emboldened by the prospect of “quick enrichment” amid rising gold prices. 🌍 The influx of Chinese enthusiasts was most visible in West Africa, especially Ghana. Estimates suggest that between 2008 and 2013, more than 50,000 Chinese nationals entered the country to participate in illegal gold mining. ⚙️ But Chinese diggers were notable not only for their numbers. The “Go Out” policy allowed them to bring in heavy machinery on a massive scale — something previously unseen in illegal gold mining. ⏩ The scheme was simple: 🔸A major Chinese investor arrives in Country X with heavy equipment backed by the Chinese government and its loans under the "Going Out" policy 🔸Part of that equipment is then written off and quietly sold to illegal groups 🔸Those groups use it to level forests and dig enormous pits nearby. 🏁 As a result, local artisanal miners are either pushed out or join the Chinese operations, and the soil is left contaminated with mercury and lead all across the continent. #PolicyReview Devils Below

⚠️Where Can Resource Nationalism Lead? [ #PolicyReview ] The answer: to success. For details let's look at the example of Indonesia. ⏩ Indonesia did something many resource countries only talk about: it made mining companies stop shipping the rock and start building plants. 🔸In the late 2000s Indonesia was a big supplier of raw nickel ore to Asia, mostly to China. There were only a couple of smelters in the country and most income left with the ships. 🔸 By 2024 it was supplying more than half of global primary nickel, exports of processed nickel reached tens o f billions of dollars, and whole industrial parks grew next to the mines. ⏩ This change did not come from a single decree. Indonesia adopted policies that created places to invest, tax holidays, power supply and a clear sign that the government would not reverse the core idea. So, what exactly did Indonesia do? 🔸 2009 – the key mining law (Law No. 4/2009) appeared. It said minerals had to be processed inside the country and it prepared the ground for export restrictions. It also pushed for more Indonesian participation in mining projects. 🔸 2013 – Indonesia and China agreed to develop the Indonesia Morowali Industrial Park (IMIP) in Sulawesi, close to nickel deposits. This gave investors a real place with a port, power, land and one large anchor company (Tsingshan). From that moment investors knew processing could be done right at the source. 🔸 January 2014 – the export ban on unprocessed minerals, including nickel ore, was enforced. Companies that wanted to keep selling had to start building smelters. Processed nickel exports later jumped from about USD 6 billion in 2013 to around USD 30 billion in 2022. 🔸 2010s – 2020s – inside the new industrial parks (IMIP, later Weda Bay) the state added fiscal and non-fiscal support: tax holidays up to 20 years, exemptions on imported equipment, simpler permits, special labour rules. 🔸 2019 and after – the government fixed the next goal: electric vehicles and battery materials, with a presidential regulation in 2019 and follow-up plans. So the story did not stop at smelting, it moved to higher-value uses of nickel. In about a decade, Indonesia turned a complaint (“we export too much raw ore”) into a system that forces value to stay at home - eventually into an example to follow. Devils Below

⚙️ Nigeria’s Unrealized Potential Why billion-dollar domestic processing plants never really started In Nigeria, more than $8 billion has been spent over 50 years on the Ajaokuta steel project and the plant still has no commercial steel output. That fact captures a common pattern of Nigerian resource processing factories built in the 1980s - 2000s, which hardly moved from “commissioned” to “working.” ⏩How could it be that Nigeria had already created a huge industrial potential, but for some reason has never taken advantage of it? What kind of industry Nigeria built in the 1980-1990s: Steel and Aluminium: 🔸 Ajaokuta Steel Company — idle since 1994 to present; 🔸ALSCON (Aluminium Smelter) — largely dormant since 2007 with brief revival attempts; 🔸National Ore Mining Company — effectively moribund for many years after 2008; 🔸Delta Steel Company — mostly idle until a private restart effort after 2018; 🔸Jos Steel Rolling Company — moribund by the 2000s; 🔸Osogbo Steel Rolling Mill — plant left idle since 2005; 🔸Katsina Steel Rolling Mill — moribund by mid-2000s and sold in 2006 after closures; Oil: 🔸Warri Refining & Petrochemical Company — repeated stoppages, largely idle from late 2010s onward; 🔸Port Harcourt Refining Company — prolonged shutdowns, largely idle from 2019 onward; 🔸Kaduna Refining & Petrochemical Company — prolonged shutdowns and very low utilisation, especially from late 2010s onward. Paper and Pulp: 🔸Iwopin Pulp & Paper — stopped by 1996–1998 and idle thereafter; 🔸 Newsprint Manufacturing Company — shut in 1994, long-term dormancy followed; Sugar: 🔸Savannah Sugar Company — stoppages through the 1990s–2000s, later privatized. ⏩All this accounts for almost $90 billion in investments. But why so many plants never truly started? 🔸Liberal reforms in 1985-1990s (aka "Structural Adjustment") facilitated imports of foreign end products, making newly built domestic factories unprofitable. 🔸 The government failed to maintain policy consistency and predictability. In 1988-1993 and from 1999 onwards the government embarked on privatization, with concessions and privatizations often becoming court fights. Years of arbitration froze assets and scared off operators. 🔸 Poor planning: too often project designs relied mainly on imported spares, chemicals, and equipment, which made them idle each time when foreign exchange dried up nationwide. 🔸Factory projects also often required that additional infrastructure be built, without which they could not operate due to the lack of existing facilities. When subcontractors or the government failed, enterprises were deprived of gas and power, rail links, raw materials. The government has tried to fix the situation through new partnerships, further privatization, sector and individual reactivation plans. This, however did not fix fuel, feedstock, and poor logistics. Many of the factories that have been staying idle since the 1990s are now technologically obsolete and covered with rust - once you touch them, you will hear a lot of noise. Nigeria’s “commissioned-but-never-launched” factories were not accidents. They were outcomes of projects built without reliable inputs, power, and logistics, which dropped into volatile policy weather and weak governance. This needs to be taken into account if the country plans to move from resource extraction to domestic value-addition. #PolicyReview#Nigeria Devils Below

🚀 Japan Urged to Reevaluate Spending on Social Programs Japan is being advised to reassess its financial commitments to programs supporting women, environmental initiatives, and foreign nationals. Bloomberg posted on X, highlighting a summary of responses from a recent government survey. The survey suggests that these areas may require a strategic review to ensure effective allocation of resources. The call for reevaluation comes amid broader discussions on optimizing government spending to address pressing national priorities. The survey's findings could influence future policy decisions as Japan navigates its economic and social challenges. #Japan#SocialPrograms#GovernmentSpending#Women#Environment#ForeignNationals#PolicyReview#EconomicChallenges#SocialPolicy