Africa: The United Nations Economic Commission for Africa calls for structural transformation in Africa’s economic model
ADDIS ABABA – The United Nations Economic Commission for Africa has urged African leaders to undertake a fundamental restructuring of the continent’s economic model, warning that reliance on raw commodity exports can no longer support long-term development goals.
Addressing the 48th Ordinary Session of the Executive Council of the African Union, which opened today in Addis Ababa, UN Under-Secretary-General and Executive Secretary of the Economic Commission for Africa, Clavier Gatete, said Africa must accelerate industrialization, expand value addition and diversify its economies to withstand external shocks and volatile global markets.
“The rules of development are changing,” Gatete told the ministers, noting that slowing global growth, escalating trade tensions and increasingly complex supply chains are reshaping the international economic landscape.
He said African countries should reduce their dependence on abroad by enhancing domestic production and deepening regional integration.
Keep up with the latest headlines on WhatsApp | LinkedIn
Gatete drew attention to what he described as structural financing constraints. Only three African countries currently have investment-grade credit ratings, a reality that increases borrowing costs and restricts access to affordable long-term capital.
“High financing costs are directly hindering industrial expansion across the continent,” he said.
He stressed that transformation cannot be achieved through trade and finance reforms alone. He pointed out that water and sanitation systems must be treated as basic economic infrastructure and not just social services.
He added that with more than 300 million Africans lacking access to safe drinking water, shortages are disrupting industrial areas, slowing urban development and weakening competitiveness.
“When production inputs are unreliable, economies cannot industrialize competitively,” Gatete said, emphasizing the direct relationship between water security and industrial performance.
To drive structural transformation, he identified a set of priority actions that include enhancing domestic resource mobilization, enhancing integrated infrastructure planning, fully implementing the African Continental Free Trade Area, and investing in digital public infrastructure and artificial intelligence.
Regarding domestic revenues, Gatete noted that the average tax-to-GDP ratio in Africa is about 16 percent, compared to about 34 percent in Europe. He said that expanding the tax base and improving revenue management would provide governments with greater financial space to finance development.
Sign up for AllAfrica’s free newsletters
Get the latest African news delivered straight to your inbox
He also called for coordinated infrastructure development, where water networks are planned alongside transportation corridors and digital networks to maximize economic impact. He warned that fragmented investments in infrastructure limit productivity gains and reduce returns.
Gatete said full implementation of the African Continental Free Trade Area (AfCFTA) remains key to building regional value chains.
He emphasized that through the African Continental Free Trade Area, African countries can process their minerals and agricultural products, and shift away from exporting low-value raw materials towards higher-value manufactured goods.
Digital public infrastructure and artificial intelligence were highlighted as additional drivers of efficiency and productivity. By modernizing public services and supporting industrial innovation, technology can help governments and businesses operate more competitively.
Despite the challenges, Gatete expressed confidence in Africa’s long-term prospects. He said that the continent’s huge renewable energy potential and its young population provide a strong foundation for sustainable growth.
“By aligning finance, infrastructure and industry, Africa can move from being a marginal participant in global markets to becoming an active architect of its own development path,” he said.
Gatete reiterated UNECA’s commitment to supporting this integrated agenda, stressing that Africa’s natural and human resources must translate into tangible and comprehensive benefits for its people.
