Africa’s trade balance has been deteriorating over the past five years from a surplus of $24 billion in 2012 to a deficit of $154.9 billion.
This is indicated on Friday by Ms. Vera Songwe, Executive Secretary of the United Nations Economic Commission for Africa (UNECA). Indeed, Africa’s share in global exports continued to decrease, from 3.5% in 2012 to 2.2 in 2016.
Primary commodities and raw materials continue to represent the largest share of Africa’s exported products. Last year fuels alone accounted for 36.2% of the value of Africa’s exports while the share of manufacturing products was 26.7%,” she said, speaking in Addis Ababa.
She noted Africa’s reliance on primary commodity exports has exposed the countries to uncertainty and shocks because of fluctuations of the prices in the global market. “For instance the fall of oil price in 2014 has had a significant impact on African oil producing countries in terms of budgetary revenue losses, leaving them with large budget deficits and high levels of debt, and affecting those countries’ macroeconomic stability,” Ms. Vera Songwe said.
Along with oil price decline, decreased world demand for primary African products resulted in depreciation of some of the currencies of African countries. In 2016, the Nigerian naira, the Mozambique metical and the Sierra Leone leone declined against the U.S. dollar respectively by 37%, 35% and 28%.
However she noted that solid exports growth was experienced with an 8.9% increase in 2017, due to the recovery in global economy and global trade activity. In the first quarter of 2017, Africa’s exports to China jumped by 46% compared with the same period in 2016.
“…Despite the better performances in 2017, the figures reflect Africa’s limited competitiveness, its lack of diversification and its challenges in adapting to the evolving international trade environment,” she said.