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.
Another comparative advantage is Africa’s vast reserves of critical minerals – including aluminum, cobalt, copper, lithium and manganese – needed for high-tech and green products like smartphones and solar panels.
Expanding energy supply chains into Africa is also an opportunity to accelerate climate action. The continent has at least a fifth of the world’s reserves in a dozen metals critical for the energy transition – including about 19% of those needed for electric cars.
As the global push for cleaner energy intensifies, demand for such metals will soar – an electric car, for example, needs about six times more minerals than a traditional vehicle.
Besides providing direct access to the raw materials, African economies can help manufacturers shorten and simplify supply chains and cut transportation costs by locally processing the metals into intermediate products, such as batteries or screens.
Africa also offers opportunities to green supply chains by tapping the continent’s green hydrogen potential and renewable energy resources, particularly solar.
To seize these comparative advantages, African countries need to enhance productivity through technology adoption, improve logistics and leverage trade agreements.
Investments in the continent’s infrastructure, including ports, roads and rail, have lagged, contributing to delays that discourage businesses from sourcing products from African countries.
Initiatives like the continental Programme for Infrastructure Development in Africa and South-South partnerships such as the Silk Road Economic Belt initiative could help upgrade the region’s infrastructure.
Source link : https://unctad.org/publication/economic-development-africa-report-2023
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Publish date : 2023-08-16 09:02:59
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