The United Nations Trade Organization on Thursday said African economies were vulnerable to a triple shock as it urged governments to pave the way for technology startups that would reduce dependence on commodities.
“A recent analysis by the UN Global Crisis Response Group on Food, Energy and Finance, analyzing the global economic cost of the war in Ukraine, shows that Africa, and particularly sub-Saharan Africa, is one of the most vulnerable regions in the world today Crisis,” said Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), at the launch of the panel’s latest Africa report.
“One in two Africans – that’s over 600 million people – is highly vulnerable to food, energy and financial shocks at the same time,” she added.
The report recommended diversification away from commodity exports, on which many African economies remain dependent, and traditional service sectors – such as travel and transport – into more knowledge-intensive services.
“For as long as I can remember we’ve talked about diversification and how Africa can diversify its economy, and the fact is we’ve been looking at this through the lens of diversification within the resource sector,” said Paul Akiwumi, a director at UNCTAD .
“Now it’s also very timely because of the technology,” he added.
He pointed to emerging fintech, healthtech, agritech, e-mobility and other technology-oriented sectors in African countries.
“Africa has a growing educated middle class that needs these jobs, and these types of small and medium-sized businesses provide highly skilled jobs — operations officers, financial officers, government liaison officers, software engineers, human resources managers, administrative accountants,” he said.
Akiwumi said governments must provide entrepreneurs with the necessary regulatory frameworks, as well as training and capacity building.
He also said they must implement the African Continental Free Trade Area (AfCFTA) agreement, a trade deal that came into effect last year to spur developments across the continent.
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