UNCTAD urges African countries to rethink export diversification to survive economic shocks

UNCTAD is advising African nations to reassess their export diversification strategies to enhance resilience against economic shocks. The focus is on leveraging technologies, particularly financial technologies, to boost the export of high knowledge- and technology-intensive goods and services. By promoting innovation and smart services like blockchain and fintech, African countries can improve market access and address funding challenges.

The UN United Nations Conference on Trade and Development (UNCTAD) published the Economic Development in Africa Report 2022 under the title Rethinking the Foundations of Export Diversification in Africa: The Catalytic Role of Business and Financial Services. The report underscores the role of technologies in the diversification of the African economies with a special focus on financial technologies. According to the report, while high knowledge-intensive services, such as information technology and financial services, could be a game-changer for Africa, they still account for only 20% of the continent’s services exports, leaving immense room for growth. Therefore, Africa needs to promote the use of high knowledge- and technology-intensive inputs to enable the manufacture and export of more complex goods and services rather than primary commodities. In this vein, technologies and smart services such as blockchain can improve access to diverse and competitive markets both within and outside the continent. Fintech can also improve traditional credit channels and help bridge the huge funding gap facing African SMEs, if countries implement policies to better harness its power.