Africa’s exports still lagging behind other developing nations, says UN report

While two decades of trade liberalization have removed many of the barriers that limited Africa’s trade, progress has been less than expected, and below that of other developing countries, according to a new report released by the United Nations.

According to Economic Development in Africa 2008, published by the UN Conference on Trade and Development (UNCTAD), the continent lost market share from 6 per cent of world exports in 1980 to about 3 per cent in 2007.

Compared to other developing regions, the increase in Africa’s export value was driven primarily by an external factor – rising export commodity prices – rather than increasing volumes.

Between 1995 and 2006, both export volumes and prices grew at about 6 per cent per year. During the same period, Asia’s export volumes grew by 10 per cent per year while the prices increased by only 1 per cent per year, the report finds.

The main obstacle faced by African countries, states the report, is their limited ability to produce the quantity and quality of goods required to meet the demands of the global market.

“They need such building blocks as well-trained workforces, reliable electricity supply, research and development skills, flexible investment and banking services, and efficient transportation to supply, at competitive prices, large volumes of products for which there is global demand,” UNCTAD says in a news release.

African governments must also take steps to reverse what the agency calls “decades of relative neglect” of agriculture. “In the space of a generation, Africa’s agriculture has so dramatically declined that Africa has fallen from its status of a net food producer to become the region most dependent on external food aid,” it states.

The report also recommends that African countries further diversify their economies and expand their manufacturing sector.

The release of UNCTAD’s annual report on African development comes as the agency begins a two-week meeting of its governing Trade and Development Board in Geneva.

Addressing the opening session today, UNCTAD’s Secretary-General stressed that boosting production in both industry and agriculture in developing countries is the best way to reach the anti-poverty targets known as the Millennium Development Goals (MDGs) by the target date of 2015.

Supachai Panitchpakdi told the Board that greater attention is needed on boosting agricultural productivity, calling for urgent efforts to tackle the underlying causes of the current global food crisis “which are to be found in the longstanding neglect of agriculture in many developing countries.

“Indeed, in many LDCs [least developed countries], agricultural productivity is lower today than it was 50 years ago,” he pointed out.

Mr. Panitchpakdi added that improving the productive capacities of developing countries will require an increase in official development assistance (ODA), as well as using international aid more effectively.

The outcome of the Board’s meeting is expected to contribute to a high-level event on the MDGs to be convened at UN Headquarters in New York on 25 September.