In Africa today, we recognise that trade and investment, and not aid, are pillars of development
Paul Kagame
Despite the resources available on this continent, Africa, taken as a whole, is a net importer of goods. In 2017 4,571 products were exported to 232 countries and 4,636 products were imported from 235 countries.
One of the main problems we suffer is that we export goods of lower value and then import goods (sometimes the very same goods transformed into a more finished and refined product) at a higher value. For example, a large section of the “upwardly mobile” part of the population in Africa swears by luxury goods such as watches, phones and cars. However very few, if any, of these goods are produced in Africa. And even where they are, many Africans would rather purchase Swiss-made watches and German- or Italian-made cars if they have the resources. The diamonds and platinum for the watches or the cobalt for the cellphone batteries leave the continent in as basic a form as possible, but get purchased back as a finished good at sometimes as much as 200 times the original value.
Trade, is certainly a must for the alleviation of poverty on the continent and even for “peace” to a certain extent. However, as we state here, the aim should be for more factories to be established in our own countries. Even if, for now, we focus on transforming a small percentage of products by a small margin. That could easily represent an enormous uptick (in the billions of USD depending on the product) for the continent.
At present, South Africa (SA) is the biggest exporter on the continent (officially).[efn_note]In many war-torn regions, such as the Goma region in the DRC, resources like gold and diamonds leave that country “undocumented” and therefore cannot form part of an official metric.[/efn_note] It is one of the world’s biggest producers of gold and has a significant diamond industry as well. The country has a well-developed law system. SA has a large pool of skilled labour and, advanced infrastructure and developed financial resources. All these factors are largely missing from other countries.
Exports from Africa totaled US$477 billion in 2018 almost 13% up from the year before. There are some countries, such as the Central African Republic that have increased their exports by as much as 380% over the last 5 years. However, because of the very low base, this means that their exports only totalled USD 99.1 million. Other cases are Sierra Leone (up 143% to 678 million), Guinea (up almost 100% to 3.9 billion), Togo (up 59% to 1.3 billion), Comoros (up 55% to 95 million) and Lesotho (up almost 50% to 1.2 billion). These are definitely steps in the right direction for the continent and as more afropreneurs emerge and begin to add value to outgoing products, the continent can begin to reap the ecomomic rewards.
As one can see from the below map, the main exports are:
- Gold, diamonds and other precious metals
- Oil
- Cocoa
- Timber
- Palm oil
For the only way in which a durable peace can be created is by world-wide restoration of economic activity and international trade.
James Forrestal
There is plenty of room to grow, IF afropreneurs begin to think beyond simply “making money”. If, as a collective, we adopt a hybrid approach and make time to develop enterprises rather than just “doing deals” we trade, but we also grow.
At Unmask Africa, we help you to:
- Identify suitable businesses in countries on the African continent in which to invest
- Conduct market research and risk analysis
- Find suitable local partners OR set up your company/investment vehicle/Operation
- Ensure your venture is sustainable and future-proof
- Improve your bottom-line
- Rate your venture
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