Africa's challenges offer scope to reshape its economic future: UNCTAD

Africa can emerge stronger, more resilient and more competitive though these actions, she said at the launch of UNCTAD’s 2024 Economic Development in Africa Report recently.

Africa’s reliance on commodity exports, high trade costs and weak infrastructure make it highly vulnerable to external shocks.

Key areas for action identified by the report include reducing dependence on volatile markets, lowering costs, strengthening small and medium enterprises (SMEs); unlocking the potential of regional trade; and a gamut of policy actions for a stronger future, UNCTAD said in a release.

Close to half of African countries rely on oil, gas or minerals for at least 60 per cent of export earnings, exposing them to price fluctuations. Diversifying exports and boosting intra-African trade will create more stable revenue streams, the UNCTAD report noted.

Infrastructure gaps in transport, energy and Information and communications technology (ICT) make trade 50 per cent more expensive than the global average, limiting competitiveness, especially for landlocked nations. Investing in logistics and digital connectivity is critical to unlocking growth, the UN organisation observed.

SMEs offer four-fifths of employment across Africa, but struggle with weak infrastructure, currency volatility and limited financial access. Expanding credit, risk-management tools and regional supply chains will boost their resilience, the document said.

Intra-African trade remains one of the continent’s greatest opportunities, but it accounts for just 16 per cent of total exports, with most trade still directed outside the continent.

The full implementation of the AfCFTA could create a $3.4 trillion market, but unlocking this potential requires investing in infrastructure by expanding transport, energy and communication networks, streamlining trade policies and processes like customs, and supporting industrialisation through ways that can boost manufacturing and regional production, the UNCTAD report added.

ALCHEMPro News Desk (DS)