- The 2024 Economic Development in Africa Report by UN Trade and Development (UNCTAD) outlines how Africa can transform economic vulnerabilities into opportunities through trade, investment and regional integration.
- The African Continental Free Trade Area (AfCFTA), macroeconomic reforms and innovative financial tools can help stabilize economies and reduce reliance on volatile global markets.
- Investing in infrastructure, trade diversification and small and medium-sized enterprises (SMEs) is key to unlocking growth and driving sustainable development.
Africa has the potential to become a major driver of global trade and economic growth. The 2024 Economic Development in Africa Report, launched on 10 February by UNCTAD Secretary-General Rebeca Grynspan and Côte d’Ivoire’s Minister of Trade, Industry and SME Promotion Souleymane Diarrassouba, highlights how bold policy reforms and strategic investments can strengthen Africa’s resilience to global shocks and create new economic opportunities.
“Africa faces serious challenges – from volatile global markets and high debt costs to infrastructure gaps,” said Secretary-General Rebeca Grynspan.
“But these challenges are also a chance to reshape the continent’s economic future. With bold reforms, investment and full implementation of the AfCFTA, Africa can emerge stronger, more resilient and more competitive.”
Africa’s reliance on commodity exports, high trade costs and weak infrastructure make it highly vulnerable to external shocks. The report identifies key areas for action:
Reducing dependence on volatile markets, lowering costs, strengthening SMEs
Close to half of African countries rely on oil, gas or minerals for at least 60% of export earnings, exposing them to price fluctuations. Diversifying exports and boosting intra-African trade will create more stable revenue streams.
Infrastructure gaps in transport, energy and Information and communications technology (ICT) make trade 50% more expensive than the global average, limiting competitiveness, especially for landlocked nations. Investing in logistics and digital connectivity is critical to unlocking growth.
Small and medium-sized enterprises (SMEs) provide 80% 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.
Unlocking the potential of regional trade
Intra-African trade remains one of the continent’s greatest opportunities, but it accounts for just 16% 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 ICT networks, streamlining trade policies and processes such as customs and supporting industrialization through, for example, incentive tax breaks and affordable interest loans that can boost manufacturing and regional production.
Policy actions for a stronger future
UN Trade and Development’s Economic Development in Africa Report 2024 outlines key strategies to turn challenges into opportunities:
- Incentives for industrialization: Tax breaks, lower capital costs, affordable interest loans to firms investing in manufacturing and production for regional markets.
- Risk-management mechanisms: Establishing regional funds and early-warning systems for trade-related risks and pooling public and private resources for contingency planning and insurance.
- Crisis-response facilities: Creating trade finance mechanisms to support businesses affected by global shocks, helping them pivot to regional markets and maintain jobs.
With the right policies, Africa can strengthen economic resilience, reduce reliance on external markets, and drive inclusive growth. The path forward lies in turning vulnerabilities into lasting opportunities through bold reforms, regional collaboration and strategic investment.
Distributed by APO Group on behalf of United Nations Conference on Trade and Development (UNCTAD).