Economic development in Africa: Unlocking Africa's trade potential - Boosting regional markets and reducing risks

The Trade and Development Board

1. Welcomes the Economic Development in Africa Report 2024, taking note of the findings, which identifies different shocks and vulnerabilities that undermine Africa’s trade potential and underscores the transformative potential of regional value added trade networks in building resilience, particularly through the African Continental Free Trade Area;
2. Recognizes that African economies are among the most vulnerable in the current context of polycrisis, including political, economic, climate, technological and demographic stresses, which hinder sustainable development and trade resilience;
3. Emphasizes that a universal, rules-based, open, transparent, predictable, inclusive, non-discriminatory and equitable multilateral trading system, with the World Trade Organization at its core, is crucial;
4. Reaffirms that deepening intra-African trade and value addition is critical to buffering the continent against external shocks, and underscores the potential of the African Continental Free Trade Area to serve as a transformative platform for economic diversification, supply chain resilience and intra-African trade expansion;
5. Recognizes that economic diversification is key to reducing structural vulnerabilities, such as high dependency on natural resource exports and limited fiscal buffers, and that these structural vulnerabilities exacerbate African economies’ exposure to global market fluctuations;
6. Acknowledges the importance of efforts for the creation of a domestic enabling economic environment, by ensuring, inter alia, a stable political and regulatory landscape, conducive to encouraging entrepreneurship, supporting microenterprises and small and medium-sized enterprises, particularly those owned by women and youth, promoting the formalization of informal sector activities and attracting investments, including by promoting regional integration and fostering international partnership;
7. Highlights the importance of national policies, as well as the complementary role played by the international community to enhance macroeconomic stability and improve crisis resilience, by optimizing government spending through shock-sensitive fiscal planning and responsible lending and borrowing and by implementing regional financial market mechanisms to avoid overreliance on external debt and stabilize cross- border transactions;
8. Underlines that reducing trade costs in Africa, particularly in landlocked African countries, can help mitigate the impact of persistent fragmentation in regional supply chains, by addressing, inter alia, high non-tariff trade costs, supply chain disruptions and weak trade-related infrastructure and connectivity, which hinder intra-African trade and increase vulnerability to market uncertainties;
9. Highlights the importance of mobilizing domestic and regional capital to invest in scalable and inclusive regional networks, supported by public–private dialogue, targeted incentives and risk-sharing instruments;
10. Encourages mobilizing increased investment in productive and trade infrastructure and digital connectivity, particularly in transport and information and communications technology, to boost participation in regional value added trade networks, lower trade costs and mitigate logistic bottlenecks during global disruptions;
11. Invites Africa’s development partners to promote foreign direct investment flows in Africa, by promoting regional integration and fostering international partnerships with the aim being to drive economic growth and sustainable development and facilitate knowledge and technology transfer on mutually agreed terms;
12. Stresses the positive role that digital trade solutions and digital payment systems can play in advancing regional payment and financial integration mechanisms, such as the Pan-African Payment and Settlement System, to reduce dependency on foreign currencies and enhance participation in value added regional trade;
13. Highlights the importance of continued UNCTAD support for African businesses, particularly microenterprises and small and medium-sized enterprises, to develop enterprise risk management capabilities, including through the institutionalization of enterprise risk management practices, adoption of financial hedging instruments and participation in cross-border trade facilitation platforms;
14. Supports the development and use of regional trade diagnostics, network analytics, and market intelligence to track trade flows, identify vulnerabilities, and guide strategic interventions, and invites development partners in a position to do so to scale up assistance for trade-related institutions, customs modernization and skills development for regional trade actors;
15. Highlights the importance of the need of bilateral, regional and international development finance partners and multilateral institutions, as appropriate, to continue providing concessional financing, debt relief mechanisms, financial risk mitigation instruments and capacity-building programmes that strengthen African countries’ resilience to market uncertainties, empower African businesses, support African countries’ national development priorities and increase Africa’s competitiveness in global markets;
16. Emphasizes the importance of international efforts and collaboration to address Africa’s liquidity challenges to support the continent’s aspirations to achieve sustainable development and economic transformation;
17. Calls upon UNCTAD to continue to address the special trade and development concerns and needs of Africa, including through the provision of policy analysis and advice and capacity-building, which includes leveraging the benefits of the African Continental Free Trade Area and enhancing African countries’ productive capacities to achieve economic growth.