By Isabelle Durant, Acting Secretary-General of UNCTAD
UNCTAD was created almost 60 years ago, when Africa's share of world trade was 5.7%. Today it is only 2.5%. For least developed countries (LDCs), it is not a success story either. Ten years ago, the world agreed to help these nations double their share of world trade. But their share has barely changed, remaining at just 1%.
This is no reason to give in to pessimism. The African Continental Free Trade Agreement (AfCFTA) is a historic milestone for Africa and its least developed countries.
At present, intra-African destinations absorb barely 17% of the total exports of African LDCs. AfCFTA is therefore an opportunity for greater diversification and for improving productive capacities. However, the productive capacities of African LDCs are 30% lower than those of other developing countries, according to our Productive Capacities Index. LDCs have fallen behind particularly in two areas, both of which are infrastructure-related: information and communication technologies (ICTs), and transport and energy.
In the area of ICTs, African LDCs rank up to 56% below other developing countries. This limits their access to technology and information, or smooth communication with suppliers and customers. It also prevents their enterprises from benefiting from the latest technological developments and from exploiting the potential of e-commerce.
Weak or insufficient energy and transport infrastructure not only puts a brake on e-commerce. More generally, it has the effect of slowing down the activities of businesses and increasing their production costs, which negatively affects their competitiveness on national and international markets. It is a fact that more than 40% of LDC enterprises identify insufficient access to reliable electricity as a major constraint to their development. Inadequate transport infrastructure hinders the efficient distribution of goods in the region. It is therefore a double handicap.
Thus, in order to benefit from the free trade area, the priority for African LDCs is to accelerate investments in different types of infrastructure and to promote the development of their productive capacities.
To learn more about this topic and more on productive capacities in all economies, have a look at our Productive Capacities Index.
Contact person: Isabelle Valentiny, Chief of Staff, a.i. : isabelle.valentiny@un.org
