By Cyber Era NG Special Correspondent
African economies can become major participants in global supply chains by harnessing their vast resources of materials needed by high-technology sectors and their own growing consumer markets, the United Nations Conference on Trade and Development (UNCTAD) said in its Economic Development in Africa Report 2023 launched today in Nairobi.
Supply chains encompass the systems and resources needed to develop, produce and transport goods and services from suppliers to customers.
“This is Africa’s moment to bolster its position in global supply chains as diversification efforts continue. It’s also an opportunity for the continent to strengthen its emerging industries, foster economic growth and create jobs for millions of its people,” UNCTAD Secretary-General Rebeca Grynspan said.
Africa’s abundance of critical minerals and metals, including aluminum, cobalt, copper, lithium and manganese, vital components in technology-intensive industries, positions the continent as an attractive destination for manufacturing, as recent upheavals caused by trade turbulence, geopolitical events and economic uncertainty compel manufacturers to diversify their production locations.
Africa also offers advantages such as shorter and simpler access to primary inputs, a younger, technology-aware, and adaptable labour force and a burgeoning middle class, known for its growing demand for more sophisticated goods and services
Strengthening African supply chains is key for the region’s growth
The report highlights that creating an environment conducive to technology-intensive industries would help raise wages on the continent, currently set at a minimum of US$220 per month, compared to an average of US$668 in the Americas.
Deeper integration into global supply chains would also diversify African economies, boosting their resilience to future shocks.
Expanding energy supply chains into Africa is also an opportunity to accelerate climate action. The continent’s vast renewable energy potential, particularly in solar power, can help reduce production costs and decrease reliance on fossil fuel-based energy sources.
Africa needs more investment in renewable energy to help bridge the significant investment gap and tackle other obstacles to the manufacturing of solar panels on the continent. Currently, only about 2 per cent of global investments in renewable energy go to Africa. The growth of investment in renewable energy, as shown by UNCTAD, could promote the manufacturing of solar panels on the continent.
As an example, in 2022, the Democratic Republic of the Congo was the largest producer of copper in Africa, at 1.8 million metric tons – and beyond exploration and extraction, the country is a potential destination for refining metal products for the electric vehicles industry.
