Addis Ababa — The United Nations Economic Commission for Africa has urged African leaders to undertake a fundamental restructuring of the continent’s economic model, cautioning that dependence on raw commodity exports can no longer sustain long term development goals.
Addressing the 48th Ordinary Session of the Executive Council of the African Union, which opened today in Addis Ababa, United Nations Under Secretary General and UNECA Executive Secretary Claver Gatete said Africa must accelerate industrialization, expand value addition and diversify its economies to withstand external shocks and volatile global markets.
“The rules of development are changing,” Gatete told 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.
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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.
“High financing costs are directly constraining industrial expansion across the continent,” he said.
He emphasized that transformation cannot be achieved through trade and finance reforms alone. Water and sanitation systems, he noted, must be treated as core economic infrastructure rather than solely social services.
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. Expanding the tax base and improving revenue administration, he said, would provide governments with greater fiscal space to finance development.
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He also called for coordinated infrastructure development, where water systems are planned alongside transport corridors and digital networks to maximize economic impact. Fragmented infrastructure investments, he warned, limit productivity gains and reduce returns.
The full implementation of the African Continental Free Trade Area (AfCFTA) remains central to building regional value chains, Gatete said.
Through AfCFTA, he emphasized, African countries can process their own minerals and agricultural products, shifting away from the export of low value raw materials toward higher value manufactured goods.
Digital public infrastructure and artificial intelligence were highlighted as additional drivers of efficiency and productivity. By modernizing public services and supporting industrial innovation, technology can help governments and businesses operate more competitively.
Despite the challenges, Gatete expressed confidence in Africa’s long term prospects. The continent’s vast renewable energy potential and youthful population, he said, offer a strong foundation for sustained growth.
“By aligning finance, infrastructure and industry, Africa can move from being a marginal participant in global markets to becoming an active architect of its own development path,” he said.
Gatete further reaffirmed UNECA’s commitment to supporting this integrated agenda, stressing that Africa’s natural and human resources must translate into tangible and inclusive benefits for its people.