Turning Africa’s Vulnerabilities into Resilience
The release of UNCTAD’s Economic Development in Africa Report 2024 could not be more timely. It confirms what many of us in the African business and trade community have long recognised: Africa’s economic promise is immense, but structural vulnerabilities continue to constrain growth, resilience and competitiveness.
Global crises, from the COVID-19 pandemic to the war in Ukraine, have exposed the fragility of our economies. Heavy reliance on commodity exports, high debt levels, weak infrastructure and climate risks have left Africa on the front line of global shocks. Nearly half of African countries now have debt-to-GDP ratios above 60%, and in many cases, governments spend more on interest payments than on health and education. Meanwhile, over 110 million Africans were affected by climate-related disasters in 2022, causing an estimated $8.5 billion in damages.
Yet the same report reminds us that Africa’s future is not defined by vulnerability but by opportunity, a $3.4 trillion opportunity anchored in the African Continental Free Trade Area (AfCFTA).
What the report gets right
The UNCTAD report provides a compelling framework for understanding Africa’s vulnerabilities across six dimensions: governance, economic, social, connectivity, energy and climate. Crucially, it highlights how these risks interact: poor governance undermines investment, weak infrastructure drives up costs, and climate shocks erode agricultural stability.
“The report rightly frames vulnerability as multidimensional,” notes Dr Dayo Abinusawa, Executive Director of the African Business Trade Association. “But more importantly, it shows how these risks overlap. For business, this is not an academic concern; it is the daily reality of higher costs, lower competitiveness and missed opportunities.”
The prescription is equally clear: diversify our economies, strengthen intra-African trade, invest in infrastructure, expand renewable energy, and support small and medium-sized enterprises (SMEs). “These are not policy slogans,” Dr Abinusawa adds, “they are the very priorities our members and stakeholders tell us are holding back growth.”
Why this matters for business
At the African Business Trade Association (ABTA), we see firsthand how these challenges impact enterprises of every size. SMEs, which provide 80% of jobs across Africa, remain particularly exposed. In 2023, 32% of African firms cited lack of access to finance as their greatest obstacle, while currency volatility and trade barriers further constrain growth.
“As long as SMEs cannot access affordable finance or hedge against risk, the AfCFTA will remain a paper opportunity rather than a lived reality,” says Dr Abinusawa. “Empowering SMEs must be at the centre of any resilience strategy.”
Infrastructure gaps are another binding constraint. African trade costs remain 50% higher than the global average, with road transport alone accounting for 29% of the cost of goods traded within Africa, compared to just 7% for goods traded outside the continent. For businesses, this translates directly into reduced competitiveness.
“Every percentage point in trade costs erodes margins, investment appetite and Africa’s ability to integrate into global supply chains,” Dr Abinusawa warns. “Closing these infrastructure gaps is not optional; it is essential.”
Energy is equally critical. Today, more than 600 million Africans lack access to reliable electricity. At the same time, renewable energy investment into Africa stood at just $15 billion in 2023, only 2.3% of the global total.
“Energy is the lifeblood of competitiveness,” Dr Abinusawa stresses. “Without reliable power, factories stand idle, digital innovation stalls, and trade flows falter. Renewable energy is an important investment frontier for Africa.”
Where we go from here
The AfCFTA offers the pathway to transform Africa’s vulnerabilities into resilience. But integration alone is not enough. To make AfCFTA a driver of growth, we need bold reforms and coordinated action:
Policy makers must accelerate the removal of non-tariff barriers, which currently restrict African trade three times more than tariffs, improve customs efficiency and strengthen fiscal management.
Investors must look beyond commodities to opportunities in manufacturing, services, green energy and technology.
Businesses, particularly SMEs, must embrace regional markets, build stronger supply chains and invest in innovation.
“At ABTA, our role is to connect these dots,” Dr Abinusawa explains. “We help businesses navigate new markets, investors find credible partners, and policymakers understand what the private sector really needs. Resilience will not come from policy alone; it will come from execution, partnerships and enterprise growth.”
Looking Ahead: ABTA Roundtable October 2025
Issues such as SME resilience, infrastructure gaps, energy access, and regional trade integration will be central to discussions at ABTA’s October 2025 roundtable with business leaders, investors, and policymakers. Learn more and register here.
A call to leadership
The UNCTAD report is a blueprint, but implementation will require leadership. Africa’s young population, with 70% under the age of 30, abundant resources and expanding markets provide the foundation. With the right investment in infrastructure, governance and enterprise resilience, Africa can emerge not as a passive recipient of global shocks, but as a global growth hub in its own right.
As UNCTAD’s Secretary-General Rebeca Grynspan observed: “The world is in polycrisis, and Africa is on the front line of exposure.”
Dr Abinusawa concludes: “The task before us is clear. We must turn vulnerability into competitiveness and exposure into opportunity. Africa cannot afford another decade of analysis without action. The time to act decisively and collaboratively is now.”