Africa (Common Wealth) _ The United Nations Conference on Trade and Development (UNCTAD) said in Nairobi that African economies can become major participants in global supply chains by exploiting their large quantities of minerals required by high-technology sectors and their own rising consumer markets.
Supply chains are the procedures and resources required to create, produce, and transfer goods and services from suppliers to customers.
As transformation efforts continue, the time has come for Africa to firmly establish itself in global supply chains.UNCTAD Secretary-General Rebeca Grynspan noted, “It is also an opportunity for the continent to boost its burgeoning sectors, promote economic growth, and create jobs for millions of people.”
Africa’s richness of critical minerals and metals, such as aluminum, cobalt, copper, lithium, and manganese, which are critical components in technology-intensive businesses, positions the continent as an appealing destination for manufacturing, as recent turmoil caused by trade turbulence, geopolitical events, and economic insecurity compel manufacturers to relocate production.
Africa also has benefits such as quicker and easier access to primary inputs, a younger, more technologically savvy, and adaptable labor force, and a booming middle class with a growing demand for increasingly sophisticated goods and services.
According to the survey, fostering a climate favorable to technology-intensive industries would aid in raising salaries on the continent, which are now fixed at a minimum of $220 per month, compared to an average of $668 in the Americas.
In addition, deeper integration into global supply chains will diversify African economies, increasing their resilience to future shocks.
Extending energy supply chains into Africa can also help to speed climate action. The tremendous renewable energy potential of the continent, notably in solar power, can help lower production costs and reduce reliance on fossil fuel-based energy sources.
More investment in renewable energy is needed in Africa to help bridge the substantial investment gap and address other barriers to the production of solar panels on the continent. Currently, Africa receives only approximately 2% of global investments in renewable energy. According to UNCTAD, increased investment in renewable energy could encourage the production of solar panels throughout the continent.
For example, the Democratic Republic of the Congo was the greatest producer of copper in Africa in 2022, with 1.8 million metric tons – and the country is a prospective destination for refining metal products for the electric car industry, in addition to exploration and extraction.
Africa requires major infrastructure investment to strengthen its position as a supply chain destination.
Seventeen African countries have previously introduced local content requirements to assist the expansion of local supply chains, foster knowledge transfer, create jobs, and add value within their borders, including Angola, Botswana, Ghana, and South Africa.
Moreover, African countries should be granted better mining contracts and exploration permits for metals used in high-tech products and supply chains. This would boost domestic industries by allowing local businesses to design, manufacture, and market products.
Adoption of cutting-edge digital technologies is also essential for streamlining supply chain procedures. Kenya, for example, has made substantial success in this area, with increased rates of digital skill acquisition across Africa.
UNCTAD encourages governments to develop sound policies, maintain an enabling regulatory environment, and expand programs to encourage the wider adoption of these technologies. The United Nations trade and development organization also reiterates its plea for better financing solutions that provide African countries and businesses with inexpensive cash and liquidity to invest in upgrading their supply chains.
