Africa is on the cusp of a new era of prosperity as a manufacturing centre for high-tech industries and a key link in global supply chains, according to a new report from the United Nations trade body United Nations Conference on Trade and Development (UNCTAD).
As the African single market – the African Continental Free Trade Area (AfCFTA) – begins operations, UNCTAD says that, with its rich natural resources and growing consumer demand, the continent is well positioned to transform its economic fortunes.
AfCFTA, which was officially launched in 2021, is focusing on operationalizing the agreement through initially eight nations concentrating on trading 96 products. When fully realized, the AfCFTA will create the world’s biggest free trade area, home to 1.7 billion people.
"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," - Rebeca Grynspan(UNCTAD Secretary General)
Launching UNCTAD’s Economic Development in Africa Report 2023, Grynspan said creating an environment conducive to technology-intensive industries would help raise wages across the continent, increasing prosperity and driving domestic consumer demand.
In January of this year, the World Economic Forum’s Insight report, AfCFTA: A New Era for Global Business and Investment in Africa, predicted that combined business and consumer spending across Africa could total $6.7 trillion by 2030 thanks to the free trade deal.
It said the four sectors that were likely to be the fastest growing due to rising local demand and their suitability for local production were: automotive; agriculture and agro-processing; pharmaceuticals; and transport.
The report says that there are opportunities in growing demand for electric vehicles, mobile phones and solar panels. It is also believed that public health would benefit from African businesses playing a bigger role in pharmaceutical and medical device supply chains. And better resource supply chain integration would aid sustainable development.
Source: World Economic Forum