African nations must reduce their heavy reliance on commodity exports to achieve sustainable growth, but a sharp decline in international project finance is hampering critical infrastructure development, according to recent reports.
A July 21 UN Trade & Development (UNCTAD) report reveals that over 80% of least-developed African countries depend on raw commodities for more than 60% of their export revenues, with Central and West African nations particularly vulnerable, earning over 80% from primary commodities between 2021 and 2023. This dependence exposes them to volatile global prices, stifling industrial progress and fiscal stability.
“Without diversification and value addition, countries risk missing opportunities to transform raw materials into engines of resilient growth,” UNCTAD warns. The report notes a $25 billion drop in Africa’s commodity export earnings over the past decade, driven by lower oil prices and rising demand for renewables, with energy’s share of exports falling from 52% to 45%.
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Hassatou Diop N’Sele, CFO of the African Development Bank, emphasized the need for industrialization and regional integration in a recent Radio France International interview. “Exporting raw materials means exporting jobs,” she said, urging faster implementation of the African Continental Free Trade Area to boost value-added production.
A July 18 Bank for International Settlements (BIS) report highlights underdeveloped infrastructure, particularly road transport, as a major barrier to intra-African trade, which could enhance economic resilience.
However, international project finance in Africa fell 13% in 2024, with a 50% drop in 2023 and a 92% decline in transport sector deals, per UNCTAD. Despite a post-pandemic recovery in export credit financing, reaching $13.4 billion in 2024, tighter global financing conditions continue to delay large-scale infrastructure investments
