Africa has potential to become new global supply chain player — UNCTAD report

With its abundant resources and growing consumer market, Africa can become a prominent manufacturing destination for tech-intensive industries and a key link in global supply chains, according to the Economic Development in Africa Report 2023 that has just been launched (16 August) by the United Nations Conference on Trade and Development (UNCTAD).

African economies can become an attractive destination for manufacturing and major participants in global supply chains by harnessing their vast resources of critical minerals and metals, including aluminum, cobalt, copper, lithium and manganese, vital components in technology-intensive industries, and their own growing consumer markets, the report says. “This is Africa’s moment to bolster its position in global supply chains as diversification efforts continue,” UNCTAD Secretary-General Rebeca Grynspan said. “It’s also an opportunity for the continent to strengthen its emerging industries, foster economic growth and create jobs for millions of its people,”

Africa also offers advantages such as shorter and simpler access to primary inputs — this is particularly important against the backdrop of recent upheavals caused by trade turbulence, geopolitical events and economic uncertainty that compel manufacturers to diversify their production locations. Apart from that, the continent also offers other advantages, such as a younger, technology-aware, and adaptable labour force and a burgeoning middle class, known for its growing demand for more sophisticated goods and services.

Last but not the least, the UNCTAD report argues that deeper integration into global supply chains would also diversify African economies, boosting their resilience to future shocks. To achieve this, UNCTAD urges African governments to create sound policies, foster an enabling regulatory environment and scale up programs to promote the widespread adoption of innovative digital technologies.