African countries’ over-dependence on a few commodities has back-fired as they had a slow growth in the economy with some of them witnessing a recession.
According to the Trade and Development Report 2017, Africa has been hit badly in the current global environment, even though East Africa, led by Ethiopia, Kenya, Rwanda and Tanzania, managed to record respectable growth in 2016.
“In the case of many of these economies, their recent predicament is the result of a long-term failure to ensure growth through diversification, and in most case over-dependence on one or a very few commodities,” states the Report.
Recently the largest economies in Africa, South Africa and Nigeria had been having problems as growth was poor. Zimbabwe is one of the countries which is still facing economic problems with its exports depending on very few commodities which include tobacco in agriculture and also on minerals like diamonds, gold, platinum, chrome and nickel in the mining sector.
Zimbabwe’s export concentration on a few products has contributed negatively to the economy as the country’s trade deficit remains high. The National Export Strategy report states that tobacco has been the main driver for export growth during the period 2012-2016 while recent global financial and economic crisis depressed international commodity prices for Zimbabwe’s major minerals exports (diamonds, gold, platinum, chrome and nickel).
It is therefore important for Zimbabwe to diversify its commodities for economic growth and to also narrow the trade deficit gap. The United Nations Conference on Trade and Development (UNCTD) launched the African Union Headquarters the Trade and Development Report 2017 yesterday.
The Report also discusses the Sustainable Development Goals (SDGs) Which came into effect in 2015 after other countries, Zimbabwe included, could not manage to implement the Millenium Development Goals (MDGs).