UNCTAD: Africa Can Become a Key Link in Global Supply Chains

The United Nations Conference on Trade and Development (UNCTAD) called on African economies to seize the opportunity to better integrate into technology-intensive global supply chains and boost prosperity, stressing that this integration is closely linked to these economies’ ability to exploit key market and investment trends.

In a new report entitled “The Potential of Africa to Capture Technology-Intensive Global Supply Chains,” the United Nations Conference on Trade and Development (UNCTAD) affirmed that Africa is more likely to become a grand exporter of higher value-added goods, subsequently generating jobs and fuelling a rise in productivity and wages.

In this context, UNCTAD’s Secretary-General, Rebeca Grynspan, stressed that diversifying trade contributes to strengthening resilience and enhancing innovation, noting that diversification was “key” for private sector development and employment opportunities for the growing African population.

Grynspan stated that African businesses aim to diversify their suppliers and reduce risk, adding that Africa is well placed to embark on this journey together with the African Continental Free Trade Area (AfCFTA), which offers excellent synergies to participate in global supply chains.

The UN official also underlined that Africa has a distinct edge in the growing market for renewable energies since it is a major supplier of raw materials for businesses that rely heavily on technology, such as the production of lithium, which is necessary for the manufacture of batteries for electric vehicles, emphasizing that the continent can potentially develop into a hub for manufacturing and export more sophisticated completed goods as opposed to merely raw materials.

Grynspan stated that the African tech ecosystem growth has been impressive, underlining that “hubs in artificial intelligence, 3D printing, blockchain, fintech, and e-commerce are thriving” in countries such as Kenya, and contribute to fostering innovation and strengthening Africa’s potential to join global technology-intensive supply chains.

The UNCTAD Chief also explained that creating an environment conducive to technology-intensive industries will raise wages, stressing that the average wage on the continent is $220/month in comparison with nearly $670 in the Americas.

UNCTAD’s report emphasized the importance of deeper integration into global supply chains as it would contribute to diversifying African economies, eventually boosting their resilience to future shocks, further stressing that today, only about 2% of global investments in renewable energies go to Africa. 

UNCTAD’s Secretary-General underlined that for Africa to utilize its competitive advantage, the continent’s economies need debt relief to create fiscal space so that countries can invest in consolidating supply chains and education for their workforce.

“This must change if Africa is to achieve its full economic potential and be a major actor in global supply chains,” emphasized Grynspan, affirming the United Nations (UN) unwavering support to African countries.

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