WTO raises alarm over Africa’s commodity dependence

The World Trade Organisation (WTO) has raised fresh concerns over Africa’s continued dependence on raw commodity exports, stating that these exports are stifling the continent’s economic growth. Addressing the media following the official opening of the WTO 14th Ministerial Conference in Youndé, Cameroon, on Thursday evening, WTO director general Ngozi Okonjo-Iweala said as a consequence, Africa’s share of world trade has been stagnating at around three percent for many years, with 60 percent of her exports in commodities. She said: “To increase its share of world trade, Africa has to add more value instead of exporting industrial commodities and unprocessed products.

“What Africa needs is for the value chains to be created on the continent so that processing can take place in manufacture of products, and therefore, creation of jobs. And so we think that Africa has the capacity to do that.” She noted that Africa holds 30 percent of the world’s critical minerals and 60 percent of its renewable solar potential, proof that the continent can grow beyond raw exports. While Malawi’s merchandise export value has declined from $1.3 billion (approx.

K2.2 trillion) in 2014 to roughly $958 million (K1.6 trillion) between 2021 and 2023, the country’s dependence on commodities remains critically high at 91 percent. According to Unctad Data Hub and World Bank WITS, Malawi’s merchandise exports were approximately $947 million to $966 million in recent years (2023–2024), down from higher levels in 2014. Out of this, commodity exports constituted $868.5 million with agricultural products having 89.5 percent between 2021 and 2023 with tobacco as a lead export, an indication that Malawi is yet to transition from overdependence on unprocessed goods for the export market.

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The strategies, among others, include the Malawi National Export Strategy (NES 2021/26), which seeks to consolidate, expand and diversify exports from Malawi in terms of product and market outreach as well as the ‘Buy Malawi Strategy’ which seeks to encourage production of locally manufactured goods. Malawi Confederation of Chambers of Commerce and Industry chief executive officer Daisy Kambalame observed that shifting toward value-addition will not only improve export earnings, but Malawi competitiveness too. She, however, said for this to happen, there is need for support towards manufacturing sector.

Meanwhile, Minister of Industrialisation, Business, Trade and Tourism Symon Itaye conceded that the country’s export profile remains narrowly-concentrated in a few primary commodities with very limited value addition, which needs urgent reforms. He stressed that reform of global trade rules must prioritise development, adding that “delivering on this priority will be essential to unlocking the full potential of trade as a driver of sustainable economic growth.”

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