Executive Secretary of the United Nations Economic Commission for Africa (ECA) Claver Gatete has cautioned African countries to avoid over dependence on raw commodity exports, urging them to restructure their economic model.
Addressing the 48th Ordinary Session of the Executive Council of the African Union (AU), on Wednesday in Addis Ababa, Ethiopian capital, Gatete said Africa must accelerate industrialization, expand value addition and diversify its economies to withstand external shocks and volatile global markets.
He emphasized that economic transformation cannot be achieved through trade and finance reforms alone. “Water and sanitation systems must be treated as core economic infrastructure rather than solely social services,” he said.
“The rules of development are changing,” Gatete told African foreign ministers, noting that sluggish global growth, mounting trade tensions and increasingly complex supply chains are reshaping the international economic landscape.
He argued that African countries must reduce external dependence by strengthening domestic production and deepening regional integration.
“High financing costs are directly constraining industrial expansion across the continent,” he said.
Gatete drew attention to what he described as a structural financing constraint. Only three African countries currently hold investment grade credit ratings, a reality that raises borrowing costs and restricts access to affordable long-term capital.
With more than 300 million Africans lacking access to safe drinking water, shortages are disrupting industrial zones, slowing urban development and weakening competitiveness, he added.
“When production inputs are unreliable, economies cannot manufacture competitively,” Gatete said, underscoring the direct link between water security and industrial performance.
To drive structural transformation, he outlined a set of priority actions that include strengthening domestic resource mobilization, advancing integrated infrastructure planning, fully implementing the African Continental Free Trade Area, and investing in digital public infrastructure and artificial intelligence.
On domestic revenue, Gatete pointed out that Africa’s average tax to GDP ratio stands at about 16 percent, compared to roughly 34 percent in Europe, noting that expanding the tax base and improving revenue administration would provide governments with greater fiscal space to finance development.
MG/abj/APA