Surprisingly small share of the total economic value created by Africa’s natural wealth is captured and retained on the continent once extraction, processing, profits and value chains are taken into account — and where Chinese firms have dominant positions this problem becomes more visible.

That does not mean nothing stays behind: royalties, wages, some taxes and limited local procurement do remain — but large shares of the highest-value steps (refining, smelting, advanced manufacturing) and a sizeable portion of corporate profits often leave the continent.

Below I explain how and why, give concrete numbers and recent examples, and end with what would need to change for Africa to capture more of its own natural wealth.

1) The structure of the value chain: raw extraction vs downstream value

The economic value of a mineral or commodity is not captured at the mine face alone. For many commodities, the bulk of value is added in processing and manufacturing — for example, turning bauxite into alumina and then into aluminum ingots, or turning copper concentrate into refined copper and then into electrical components. Yet much of African extraction is exported as unprocessed or lightly processed raw material. For bauxite and aluminum, Africa supplies very large volumes of ore but accounts for well under 5% of global alumina refining and most of the refining and smelting happens outside the continent. That means the high-margin steps — refining, smelting, fabrication — often occur elsewhere, leaving Africa with low-value exported raw ore. 

2) Recent, stark examples: Guinea and bauxite

Concrete recent examples show the pattern. Guinea — home to some of the world’s largest bauxite reserves — saw record export volumes in 2024–2025 driven largely by Chinese demand. Huge tonnage is leaving Guinea as bauxite ore; while that generates royalties and some fees at extraction, the far greater value created by refining and smelting (alumina and aluminum) is mostly captured where the refineries and smelters sit — principally in China. Reuters reporting in 2025 highlighted a surge in exports from Guinea where Chinese-controlled companies accounted for the lion’s share of shipments. The Guinean government has pressed for local refining, but at present most value is exported as raw material, not captured in-country. 

3) How much revenue actually stays? — fiscal take vs profit repatriation

Countries collect revenue through royalties, corporate taxes, wages, and some local procurement. But two structural problems limit the share that remains:

• Tax structures and incentives. Many governments offer tax holidays, low royalties or other incentives to attract investment (and in some cases to secure urgently needed infrastructure and capital). These reduce immediate fiscal capture. The IMF and other analysts have repeatedly noted that mining fiscal regimes in Sub-Saharan Africa vary and that weakly structured incentives and loopholes enable lower revenue capture than potential. 

• Profit repatriation and transfer pricing. Multinational firms — including Chinese firms operating via complex corporate groups — can shift profits out of African subsidiaries via intra-company payments, interest on loans from related parties, management fees or artificially transfer-priced contracts. This reduces taxable profit on the continent and increases repatriated earnings. The IMF has written about profit shifting and tax avoidance in SSA’s mining sector and the challenge this represents to domestic revenue mobilisation. 

Putting numbers on the share retained by host countries is difficult (it varies a lot by commodity and country), but policy research and industry facts show that for many bulk commodities a majority of the economic rent beyond basic extraction often accrues off-shore (to processors, traders, and parent firms). For refined products the host might capture a much larger share; for raw ore exports, the capture is small.

4) Chinese firms’ role: control of extraction but limited on-continent processing

Chinese companies and investors have doubled down on securing resource supplies — from bauxite and iron to copper, cobalt and lithium. But in many cases they control extraction and logistics while processing and high-value manufacturing happen in China or other manufacturing hubs. Academic surveys show that, as of a few years ago, Chinese companies directly controlled a modest but significant share of mine production in some countries (for example, larger shares in the DRC and smaller shares elsewhere), meaning they are major players in extraction, shipping and trade flows even if refining happens elsewhere. Control of extraction gives them decisive influence over quantities and terms, and because most processing occurs off continent, large parts of final value leave Africa. 

5) Local employment and procurement: some wins, but lower value

Chinese projects typically bring construction jobs, site employment and local procurement — so some income remains in the local economy. The scale of local employment matters: mining is capital-intensive, so direct labor content is lower than in manufacturing. Where Chinese firms bring Chinese labour and imported inputs for speed/cost reasons, local job creation is more limited. World Bank and other analyses of local content policies show that careful rules can force greater local procurement and employment, but enforcement is often the weak link. 

6) The multiplier effect is constrained by import patterns

Even when extraction yields wages and taxes locally, a large portion can leak out again because many African economies import inputs and consumer goods (including an increasing share of manufactured goods from China). So wages paid locally may be spent on imported goods, reducing the domestic multiplier of resource income.

7) Tax avoidance, weak governance and fiscal leakage

IMF studies show the mining sector is vulnerable to tax avoidance and profit shifting — a structural leak from national accounts into multinational balance sheets. Where governance, auditing and revenue transparency are weak, the country’s fiscal take can be far below theoretical maximums. That’s often the clearest route by which “natural wealth” leaves the continent even when resources are produced locally. 

8) Heterogeneity: some countries keep far more than others

Not all African resource producers are the same. Botswana and South Africa (in parts of their sectors) historically have extracted and processed more domestically and kept larger shares of value domestically. Others — particularly those dependent on bulk ores shipped abroad with little local processing (e.g., certain bauxite, iron ore or raw copper producers) — keep much less. Policy choices (local content rules, beneficiation requirements, fiscal terms) and capacity to implement them make the difference.

9) Recent shifts and pressures for beneficiation

Several African governments are pushing back — insisting on local refineries, higher local content, renegotiated contracts or stronger export controls. Guinea’s 2024–25 push for local alumina refining requirement is an example: authorities demand more in-country processing to retain more value, and require companies to commit to building refineries or face restrictions. Such policies — if implemented with investment support and realistic timelines — can increase the share of value staying on the continent. 

10) Bottom line and what would increase retention

• Bottom line: A substantial share of the highest-value parts of Africa’s natural-resource value chains currently leaves the continent — especially when raw materials are exported and refined/processed abroad. Chinese firms’ control of extraction magnifies this pattern because China tends to import large volumes of raw ore for its own industrial base. The continent does retain royalties, taxes (when effectively collected), some wages and local procurement — but these are often a minority share of total potential value. IMF/World Bank analyses and commodity-specific data (e.g., for bauxite) back that conclusion. 

• To retain more value Africa needs: stronger, well-designed fiscal regimes (no excessive tax holidays), enforced local content and beneficiation policies, better transfer-pricing and anti-avoidance enforcement, capacity to negotiate equitable contracts, investment in downstream processing and energy supply, and regional integration to create larger domestic markets. Those are difficult, politically charged reforms — but they are the only durable path to reverse the extraction-export pattern and keep more natural-wealth value on the continent.