Africa can become new global supply chain force: UNCTAD

African economies should seize the opportunity to better integrate into technology-intensive global supply chains and boost prosperity, but this depends on their ability to harness key market and investment trends, the UN’s trade and development body UNCTAD said on Wednesday.


In a new report, UNCTAD shows that Africa can become a major exporter of higher value-added goods, creating growth and jobs, and fuelling a rise in productivity and wages.

Launching the report in Nairobi, UNCTAD Secretary-General Rebeca Grynspan insisted it would offer a better future for the continent’s economies.

Diversifying trade “builds resilience and enhances innovation”, Ms. Grynspan said, adding that diversifaction was “key” for private sector development and employment opportunities for Africa’s growing population.

Africa’s competitive advantage

Ms. Grynspan highlighted three factors driving the “huge” opportunity for the continent. From a geopolitical point of view, countries and businesses are seeking to diversify their suppliers and thus reduce risk. Africa is well placed to tap into this trend, Ms. Grynspan said, which together with the African Continental Free Trade Area offers “great synergies” for participating in global supply chains.

Africa also has a unique advantage amid the rise of the renewable energy market, as it is a vital source of raw materials for technology-intensive industries – for instance lithium, essential to the production of electric car batteries. It has the possibility to become a destination for manufacturing and should seek to export more complex finished goods rather than just commodities, Ms. Grynspan said.

Tweet URL

As for demographics, Africa boasts not only a dynamic, young workforce, but also a “burgeoning” middle class offering local consumer markets for hi-tech goods.

‘Untapped potential’

The report analyses “untapped potential” for African countries to strengthen their position in the automobile, solar energy and pharmaceutical industries.

Encouragingly, Ms. Grynspan noted that Africa’s tech ecosystem growth has already proven impressive, as “hubs in artificial intelligence, 3D printing, blockchain, fintech [financial technology] and e-commerce are thriving” in countries such as Kenya, fostering innovation and strengthening Africa’s chance to capture technology-intensive global supply chains.

Higher wages and resilience

Creating an environment conducive to technology-intensive industries will raise wages, the UNCTAD chief said, underscoring that the average wage on the continent is $220 per month while in the Americas, in comparison, it is nearly $670.

According to UNCTAD, deeper integration into global supply chains would also diversify African economies, boosting their resilience to future shocks.




UN News | SDG Help Desk

No Comments

Sorry, the comment form is closed at this time.

Translate »