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Happy Tuesday and Welcome to Export Brief. A weekly newsletter with insightful developments and trends on non-oil export trade from Africa's largest economy and from the global stage. If you enjoy EB, share it with friends. 

• ⏲ : This edition is 1036 words, a 4-minute read.

IN BRIEF

• Africa Needs to Diversify Exports to Survive Economic Shocks - UNCTAD

• AfCFTA secretariat gets $11m from African Development Fund

EXPORT DIVERSIFICATION

Africa Needs to Diversify Exports to Survive Economic Shocks - UNCTAD

Export diversification has been identified as the pathway out of the current economic shocks been witnessed particularly in Africa, according to the recent report released by United Nations Conference on Trade and Development (UNCTAD).

• Commodities account for more than 60% of total merchandise exports in 45 of the 54 countries in Africa, leaving them highly vulnerable to global commodity price shocks and undermining the continent’s inclusive growth and development prospects, the report says.

In more detail: UNCTAD’s Economic Development in Africa Report 2022 shows that neglecting the potentially transformative role of high knowledge-intensive services, such as information and communications technology, business services and digital financial services, is among the key reasons why export diversification remains a challenge in Africa.

• "The report shows that effectively addressing barriers to services trade under the African Continental Free Trade Area will be key to unleashing the transformative role of services in enhancing the diversity and complexity of African economies."

Why it matters: UNCTAD recommends that for export diversification strategies to be impactful in Africa, policies need to be in place that enhance inclusive access to innovative financing technologies, including for small and medium-sized enterprises.

• Leveraging high knowledge-intensive services to increase productivity and improve competitiveness in the private sector will be key to achieving higher value-added diversification and growth on the continent.

By the numbers: According to UNCTAD, 83% of African countries are commodity dependent, accounting for 45% of the commodity-dependent countries worldwide.

What they're saying: "The Economic Development in Africa Report 2022 serves Africa’s effective integration into high-end global value chains. I hope that this report will prove a valuable guide to policymakers to drive the export diversification of goods and services by empowering private businesses to step into new markets and thrive." - Rebeca Grynspan, Secretary-General of UNCTAD

The boost by AfCFTA: The African Continental Free Trade Area (AfCFTA) is expected to promote export diversification by increasing access to markets; providing a framework for coordinated and harmonized policies in investment, competition and intellectual property rights; facilitating more efficient logistics through investment in customs and transport infrastructure; fostering the economic empowerment of women and youth; and supporting coordinated regional production.

The bottom line: The report stated that, while there are complex factors at play, a trade-enabling environment and a favourable regulatory environment are necessary conditions to maintain diversification success. Africa's governments, institutions and policymakers need to focus on tackling the challenges posed by regulatory bottlenecks and unattractive business climate.

TRADE ROUNDUP

CONTINENTAL TRADE | AfCFTA secretariat gets $11m from African Development Fund

The African Development Fund (ADF) said that it has approved the sum of a US$11.02 million support package to help the Permanent Secretariat of the African Continental Free Trade Area (AfCFTA) run its operations effectively and achieve its set goals.

GLOBAL TRADE | Inflation and rising commodity prices drive global trade - report

Global trade growth decelerated in Q1 2022, still increasing by about US$ 1 trillion relative to the same period of 2021.

• The value of global trade is fueled by rising commodity prices; trade volumes have increased to a much lower extent.

UPCOMING TRAINING

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COVER PAGE

VISITORS ARE WELCOME. TIME releases The World’s Greatest Places of 2022—50 extraordinary destinations to explore. With Kenya, Rwanda, Zambia and Zimbabwe making the list of destination countries exporting tourism to the world.

DATA WATCH

📊 More details: Africa doubled its services exports from 2005 to 2019, reaching $124 billion in 2019, and accounting for 17 per cent of total exports on average during the same period.

• The sharp drop in services exports in 2020 (to $82.7 billion) was primarily due to the restrictive measures put in place to contain the spread of COVID-19 pandemic, which affected all sectors of the economy, mainly transport and travel.

TWEET OF THE WEEK

PHOTO OF THE WEEK

EXPORT TRAINING: In-class trianing and excursion exercise by the participants at one the recently concluded masterclass training in Port Harcourt, South-South, Nigeria. 📷 : IEOM