African Continental Free Trade (AfCFTA) Secretary-General Wamkele Mene Saturday said that value chain development for Africa’s raw materials is crucial for achieving its development objectives.
Mene said this during the last day of the three-day Africa Prosperity Dialogue, which closed in Ghana on Saturday.
The secretary-general said well-developed value chains would help the continent achieve the targeted 7.0 percent consistent minimum annual growth rate set by the African Union in its Africa Agenda 2063 development blueprint.
He said meeting this growth target is crucial to enable Africa to create more jobs for the youth, reduce inequality, and match global growth rates.
“The key to achieving this growth target is a focus on product transformation. Today, whether it is cocoa, oil, metals, or wood, the lack of physical transformation into higher-value products is widespread, impeding the production of high-quality jobs,” said Mene.
He said Africa’s product transformation is still low at 2.7 percent, compared with 42.9 percent for developing Asia and 26.4 percent in Latin America and the Caribbeans, attributing the constant external shocks African economies experience to this low-value chain development and value addition.
“Developing value chains and production networks in Africa is, therefore, vital for enhancing productivity, deepening economic integration, and increasing resilience against economic shocks,” he urged.
On a positive note, however, the secretary-general said processed goods represent 79 percent of intra-African exports, presenting a major opportunity to boost regional production and strengthen economic resilience.
He said the continent’s role as a key supplier of raw materials, including lithium for the renewable energy market, also offers additional strategic advantage to Africa for manufacturing and exporting more sophisticated finished products.
Geopolitical trends are also working in Africa’s favor, with countries and businesses seeking to diversify their suppliers. This positions Africa advantageously to integrate more deeply into global supply chains, added the secretary-general.
“The combination of these factors, coupled with the operationalization of the AfCFTA, offers a unique opportunity to our countries to develop regional value chains and transform the continent from a raw material exporter to a manufacturing hub and key player in global value chains,” he added.
The three-day Africa Prosperity Dialogue was organized by the AfCFTA Secretariat and the Africa Prosperity Network as a platform for African leaders, captains of business, investors, and other stakeholders to dialogue on how to translate the dream of creating wealth through intra-Africa trade into reality.