Despite decades of policy reforms and renewed continental ambition, the structure of Africa’s trade remains largely unchanged – concentrated, externally dependent, and extremely vulnerable to global shocks.

This is contained in the African Export-Import Bank’s (AfreximBank) latest African Trade and Economic Outlook 2026. The report, titled: ‘Moving Up The Ladder: Capturing More Value from Africa’s Commodities’, urged Nigeria and the rest of Africa to confront a persistent structural trap, noting that the region’s export basket has not evolved in 30 years. 

According to the report, the continent continues to rely heavily on a narrow range of commodities, with limited diversification and minimal value addition. Since 2020, key indicators measuring export concentration have worsened , signalling that trade resilience may remain fragile, heading into the rest of the year. 

Even more concerning, it said, is Africa’s shrinking footprint in global trade. Despite several trade agreements and concessions, the region’s share of global exports fell to 2.3 per cent in 2024, down from 2.9 per cent in 2009, underscoring how little ground has been gained in the global marketplace. 

Despite the African Continental Free Trade Agreement (AfCFTA), trade within the continent continues to struggle. Intra-African trade accounts for just 14 to 15 per cent of total exports, a figure dwarfed by Asia (above 55 per cent) and Europe (above 70 per cent). 

Africa continues to depend heavily on external markets, leaving it exposed to global demand swings and financial volatility.

Pointing out that the structural composition of exports in Africa has remained highly concentrated and has shown limited diversification over the past three decades, the report said that export concentration and diversification indices show deterioration since 2020, suggesting that trade resilience in the region may remain fragile this year.

It noted: “The export concentration in Africa is reflected in both product composition and destination patterns. Africa’s exports have remained heavily oriented towards Europe and Asia. For example, the European Union is the major market for North African manufacturers, and China is a dominant destination for minerals and energy products. Similarly, the U.S remains important for selected hydrocarbons and manufactures.  

“Also, product concentration is equally pronounced in African exports as manufactured goods account for just 34 per cent of exports, compared with 70 per cent globally and 83 per cent in East Asia. The estimates indicate that most African countries are commodity-dependent and that commodities account for 60 to 80 per cent of the continent’s exports.

“Further analysis of the sub-regional disparities reinforces this asymmetric structure of African trade. Manufacturing exports products of Africa tend to be concentrated in a few countries, such as South Africa, Egypt, and Morocco and in narrow sectors, such as basic metals, chemicals, select food products and motor vehicles; representing about 60 per cent in North Africa, less than 30 per cent in other sub-regions and about eight per cent in West Africa, respectively. This is corroborated by UNCTAD’s evidence of pervasive reliance on commodities in both the Middle and Western Africa, which is heavily skewed toward mining.”

Analysis shows that the severity of the structural concentration of African trade may have been exacerbated by the prevalence of weak domestic processing and limited value addition. 

In this regard, it was observed that manufactured goods account for 34 per cent of exports. But their value added was only 10.5 per cent of GDP, compared with 24.8 per cent in East Asia. The low value addition, it noted, reflects constrained industrial depth and limited transformation capacity on the continent.

Also, the position of Africa in global value chains mirrors the asymmetry, as backward participation by the continent is relatively low, whereas forward participation tends to be higher. The position suggests that exports are primarily used as inputs for further processing abroad, rather than embedded in dense domestic production. 

This is encapsulated by the shallow nature of the regional value chain participation, which was found to account for only 2.7 per cent of Africa’s total global value chain participation in 2019, compared with 42.9 per cent in Asia.
 
“One of the implications is that converting resource endowments into sustained growth will require deliberate industrial deepening and re-echoes the need for a stronger regional value chain under AfCFTA and strategic movement into higher value segments of global markets,” it said.

Going further, it noted, the limited regional and global value chain participation can amplify the exposure of Africa and its macroeconomic conditions to shocks from commodity price cycles. Observing that export earnings in Africa have a strong co-movement with international commodity price cycles, the report said export values of Africa tend to rise sharply during commodity booms and contract during downturns. 

“This pattern is indicative of the price-driven nature of export growth on the continent and also its high exposure to external demand shocks. However, it should be noted that economies with more varied export baskets may experience lower volatility due to the stabilising role of diversification. Africa’s export performance remains predominantly price-driven rather than volume-driven. This is also reflected in 2024 exports, which remained high in level terms, but the merchandise trade balance still recorded a deficit, showing how quickly outcomes in Africa shift with external conditions,” it noted.