The African continent has great potential for the global supply chains development and diversification, a statement made by the UNCTAD reads.
"With abundant resources and growing consumer market, Africa can become a prominent manufacturing destination for tech-intensive industries and a key link in global supply chains," the UNCTAD said in a statement devoted to the publication of its new Economic Development in Africa Report.
According to the UN institution’s report, the continent has strengthened ties with emerging market and developing countries through South-South cooperation initiatives, such as the Association of BRICS states (Brazil, Russia, India, China, South Africa), adding that the African Continental Free Trade Area is expected to bring huge benefits to African countries, including employment opportunities and the expansion of intra-African trade.
Moreover, African countries can become major participants in global supply chains, using their huge resources of materials needed for high-tech sectors, the UNCTAD stressed.
Large reserves of minerals and metals, including aluminum, cobalt, copper, lithium and manganese, which are vital components for high-tech industries, make Africa an attractive place for production, given that recent shocks, caused by disruptions in trade and geopolitical events and economic uncertainty, are forcing manufacturers to diversify their production sites, the UN institution stated.
In the preface to the report, UNCTAD Secretary-General Rebeca Grynspan recalled that Africa accounts for 48% of the world's cobalt reserves and 47.6% of manganese reserves, which are critical metals needed for the production of batteries and electric vehicles.
"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," Grynspan was quoted in the statement as saying.
In turn, according to the UNCTAD, Africa's growing population, expanding consumer markets and business opportunities are the main sources of growth and prosperity for the whole world and key factors that position Africa as a strategic region in pursuit of geographically diversified supply chains.
Grynspan urged the countries of the continent to avoid being tied to supplies of just raw materials, as this leads to very low-value integration into global supply chains.
Instead, she urged the continent's nations to focus on participation in the supply of products with high added value.
"With the world’s youngest and fastest-growing population (about 60% of Africans are under the age of 25), the continent is emerging as a magnet for consumer markets and products, making it an attractive destination for supply chains," a report issued by the UN stated.
According to the report's authors, Africa needs more investment in renewable energy sources to help overcome the significant shortfall in investment and remove other obstacles to the production of solar panels on the continent.
UNCTAD is an agency of the UN General Assembly, established in 1964. Its main objectives are promotion of international trade, equal, mutually beneficial cooperation between nations, participation in the coordination of actions of other UN agencies in the field of economic development of economic relations.