The Economic Paradox of Africa
Africa stands at a pivotal moment in its economic journey, facing global economic shocks and disruptions that have been exacerbated by the war in the Gulf. Despite producing approximately 10 million barrels of oil per day, which accounts for about 10 percent of global output, the continent remains a net importer of petroleum products, consuming around 120 million tonnes annually at a cost of $90 billion.
At an average export price of $75 per barrel, Africa’s crude production is valued at roughly $270 billion each year. However, if this same production were refined domestically and exported as finished products at an average price of $800 per tonne, it could generate over $500 billion. This represents a significant loss of potential income, amounting to about $230 billion, which is nearly 7.5 percent of our GDP from just one resource.
This does not even consider the additional gains from downstream industries such as plastics and fertilisers, which we currently import. These industries could add another 2-3 percent to our GDP. Africa’s place in global trade is defined by a structural imbalance that requires urgent attention. According to UN Trade and Development, the continent continues to export predominantly raw materials—minerals, fuels, and agricultural commodities—while importing the very products manufactured from those same resources.
In many of our economies, over 60 percent of exports remain commodity-based, while we import nearly three times more manufactured goods than we export. It should not surprise us, therefore, that manufacturing has stagnated at about 10 percent of GDP for the past two decades.
As long as this pattern persists, our growth will remain constrained, our economies vulnerable, and our full potential unrealised. The leaders of 50 or 60 years ago may be excused. Our continent then had a population of only 350 million, largely rural and with limited purchasing power.
Today, with a population of 1.5 billion and a middle class of between 300 and 350 million people, we have no such excuse. We cannot continue exporting raw materials and importing the finished goods made from them.
The conversations we will have over the next two days must therefore be truly definitive on the way forward in terms of manufacturing and value addition. In this room, we have political leaders, industrialists, captains of industry, and financiers, everyone required to move this agenda from aspiration to implementation.
Many of the nations we admire today—Singapore, South Korea, and even Japan—once stood where we stand now: Constrained and uncertain of their place in the world. But they made a choice. Through disciplined leadership, bold policy, and an unrelenting commitment to progress, they rewrote their future. And they did so within a single generation.
That is why I propose three key action points. First, we must strengthen our political resolve to deepen regional integration. Our countries possess complementary endowments, including natural resources in one country, energy in another, and optimal locations for industrial processing in other countries. These must be connected through infrastructure—roads, railways, ports, and electricity grids—so that raw materials and intermediate goods can move freely across borders.
Equally important, the benefits of such integration must be shared equitably, ensuring that national boundaries do not impede the full realisation of a common market with the free movement of goods, capital, and people.
Second, we must establish regional platforms for strategic industries. It is worth recalling that the European Union began as the European Coal and Steel Community in 1951. Our East African region is richly endowed with renewable energy and the full spectrum of minerals driving the global energy transition, including copper, cobalt, nickel, manganese, graphite, lithium, and rare earth elements.
We must now move deliberately to pool these resources and position ourselves competitively in global green manufacturing. However, we cannot achieve competitiveness without affordable energy, making large-scale investment in renewable energy an urgent priority.
Third, we must harness African capital. As the saying goes, he who pays the piper calls the tune. Our ambitions will remain unrealised if we continue to depend on external capital whose primary interest is securing raw materials for their own industries.
We must therefore strengthen our regional development finance institutions, including AFC, Afreximbank, and the Trade Development Bank, while simultaneously building robust national financing mechanisms. In Kenya, we have established a National Infrastructure Fund and are in the process of creating a Sovereign Wealth Fund, following in the footsteps of some of our peers on the continent, including Nigeria, Ghana, and South Africa.
Through these instruments, we aim to mobilise public and private, as well as domestic and foreign, capital to fund major priority projects worth an estimated Ksh5 trillion, or $40 billion, over the next decade.
For far too long, the economic destiny of our continent has been shaped by others. While historical injustices—from colonialism to inequities in the global economic order—are real, we must also acknowledge that other regions have faced similar challenges but risen above them.
We are constrained only to the extent that we accept the status quo through acquiescence, complacency, and limited ambition. Too often, as a continent, we have settled for what is rather than what could be. For far too long, we have accepted the average. That must now change. We must raise the scale of our ambition and refuse to be defined by what is merely functional.
The time has come for Africa to take full control of its destiny. That is the lesson before us: Transformation is neither accidental nor a miracle. It is deliberate. It is intentional. And it is entirely within reach if we have the resolve to pursue it, to reach higher, and to reject the average.
