Economic Development in Africa Report 2023

Economic Development in Africa Report 2023

The United Nations Conference on Trade and Development (UNCTAD) presented a working report on the economic development of the African continent.

Experts analyzed the potential of the region in terms of integration into global production chains. As the authors note, in 2021-2022. economic growth in the region decreased from 4.5% to 3.7%. To increase the pace of socio-economic development, investments are needed in expanding production capacities, modernizing infrastructure and digital transformation.

The economic consequences of the COVID-19 pandemic, the energy crisis, and the growing geopolitical confrontation have highlighted the need for diversification of production for developed countries and have increased the investment attractiveness of Africa. Among the key advantages of the region:

  • Abundance of the most important minerals necessary for the production of high-tech and environmentally friendly products (one fifth of the world's reserves of rare earth metals are located on the continent, Africa provides 12% of the world's exports of vital minerals used in the medical industry)
  • Demographic resources: about 60% of Africans are under 25;
  • The African Continental Free Trade Area also offers easier access to regional markets.

It is estimated that in the period 2021-2022. Supply chain finance in the African region has grown by 40% to $41 billion, but this is not enough. UNCTAD recommends that African governments:

  • Enter into more lucrative mining contracts to strengthen domestic industry and enable local firms to develop, procure, and manufacture required components
  • Increase funding for programs to develop infrastructure, science and human capital;
  • Create a favorable regulatory environment for investors.

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