As the major inputs used to manufacture mobile phone are abundantly found in many African countries, mainly the Democratic Republic of Congo (DRC), investors can cut their cost if they setup their manufacturing plant in the country, says a new report by a UN agency.
The report released on Wednesday by United Nations Conference on Trade and Development (UNCTAD) stated that the investment for precursor facility in DRC is three times less than what it would cost for a similar plant in a country without the required natural resources or proximity to countries where those metals can be sourced.
“It is estimated that building a 10,000-ton precursor facility in the Democratic Republic of the Congo, for instance, could cost $39 million, which is three times less than what it would cost for a similar plant in a country without the required natural resources or proximity to countries where those metals can be sourced,” stated the Economici Development in Africa Report 2023 that analyzes value chain of different products.
The report recalls that in 2021, the mobile technology company Africell and Industry Five, a
global smart manufacturing vendor, collaborated to develop assembling facilities for mobile telephones in DRC. The factory in Kinshasa is equipped with modular and mobile workstations, and workers are trained to reach quality standards and handle proprietary handsets. In addition, workers are assisted by state-of-the art robots.
“In addition to its large reserves of cobalt, representing about 70 per cent of global supply, the Democratic Republic of the Congo could develop a precursor plant by procuring nickel from Madagascar and shipping it through Mozambique or the United Republic of Tanzania or procuring additional manganese from neighboring country Gabon,” the report stated.
“These regional procurement and production opportunities will be facilitated under the African Continental Free Trade Area and strengthened by increased infrastructure investment.” Several African companies, such as the Mara Group in Rwanda, Onyx in South Africa and VMK in the Republic of the Congo, have emerged in the precursor development market, in addition to Transsion, the leading Chinese mobile manufacturer in Africa, according to the report.
“Developing mobile telephone supply chain capacities in Africa can unlock further potential in the electronics supply chain and open up market opportunities towards the production of tablets, laptops and high-performance servers, and data storage solutions. These are key goods and services that are predicted to be in increasing demand by the growing consumer market in Africa, including electronic commerce and other technology-based services,” it said.
The report, “The Potential of Africa to Capture Technology-Intensive Global Supply Chains”, indicated that the electronics industry, especially the mobile telephone supply chain can catch the eye of many potential investors and companies that are pursuing the diversification of their supply chains and exploring Africa as a new or alternative destination.
It further noted that most of the minerals and metals that go into the production of smartphones can be sourced within African countries. For instance, the continent has large reserves of cobalt, copper, graphite, lithium, manganese and nickel, which are used in the production of telephone batteries, circuit boards and other components.
“The abundance of these resources also provides vast opportunity for strengthening regional supply chains in mobile phone production from precursor production. The production of cathode precursors (nickel-manganese-cobalt oxides), a main ingredient in the manufacture of battery components, can contribute to higher value capture in the battery industry and integration into the electronics and mobile telephone supply chain,” stated the UNCTAD report that includes several case studies of supply chain in different African countries and sectors.