Africa's Trade Paradox: Closing the Gap in African Trade

 

One would think that with the vast amount of resources Africa exports, it would command a significant share of global trade. However, the contrary is the case. Africa accounts for only about 2% - 3% of global trade.

Despite producing so much, the continent remains in the lower cadre economically and, by extension, politically.

A major reason for this paradox is the over-reliance on foreign expertise, foreign brands, and foreign finished goods, as well as the continuous export of natural resources in their unprocessed state. Africa produces raw wealth but exports it without capturing its full value.

Africa depends heavily on foreign goods and services. The continent imports extensively from Europe, America, and many Asian countries. Over time, a strong taste for foreign goods has developed, driving high levels of imports. Consequently, imports exceed exports, leaving little to no retained profit because foreign exchange earnings are recycled back into importation.

It is deeply unfortunate that Africa continues to import goods it has the capacity to produce.

A classic example on how imports can erode export income can be seen below:

~ In 2024, Mali exported $159M of cotton, making it the 34th largest exporter of cotton.

~ In 2024, Mali imported $216M of processed cotton products, becoming the 41st largest importer of cotton.

At a glance, the imbalance is clear. The country exported raw cotton but imported higher-value cotton products, effectively losing value within the same sector.

Most products exported from Africa are primary commodities with little or no value added. This makes them less competitive and far less profitable in the global market.

~ Cocoa

About 60% of the world’s cocoa comes from two African countries - Côte d’Ivoire and Ghana.

Côte d’Ivoire accounts for 40% - 45% of global cocoa supply. It is the world’s largest cocoa producer, followed by Ghana. Currently, Côte d'Ivoire processes about 44% of its cocoa locally, while exporting the rest as raw cocoa beans.

Ghana supplies cocoa beans for Swiss chocolate - often acclaimed as the best chocolate in the world - and accounts for about 20% of global cocoa production. Yet less than 30% of Ghana’s cocoa is processed locally.

The raw wealth leaves; the premium branding and margins remain elsewhere.

~ Cotton

Mali is the top cotton producer in Africa, followed by Benin. Mali ranks among the top 15 cotton producers globally.

But does Mali produce cotton fabrics at scale?

Less than 1% of its cotton is processed locally. The rest is exported raw. Yet Mali imports large quantities of processed cotton products and fabrics.

Again, value is created elsewhere.

~Tea

Kenya is the largest producer and exporter of tea in Africa, accounting for roughly 70% of the continent’s total output and ranking as the third-largest producer globally.

Approximately 94% - 95% of tea produced in Kenya is exported in raw or semi-processed bulk form (mainly CTC – Crush, Tear, Curl). Only about 5% - 6% is processed or value-added locally.

Here's the twist: Despite being the 3rd largest producer of tea globally, Kenya imported $48.3 million worth of tea in 2024, ranking as the 39th largest tea importer globally (out of 222).

~Crude Oil

Nigeria is Africa’s largest oil-producing country and ranks among the top 16 oil producers in the world.

Yet Nigeria imports refined petroleum products despite being a major crude oil exporter.

We export crude. We import fuel.

~ Iron Ore

South Africa is Africa’s largest producer of iron ore.

In 2024, South Africa exported $6.69B of iron ore, making it the 4th largest exporter globally (out of 130 countries). The country produces far more iron ore than the domestic economy can absorb.

Yet South Africa processes only a relatively small percentage domestically and spends billions of dollars importing iron and steel products.

~ Rubber

Côte d’Ivoire is Africa’s largest rubber producer, accounting for roughly 80% of the continent’s total output and ranking 3rd to 4th globally.

Despite this, Côte d’Ivoire imports various rubber products, even though it is a major exporter of raw natural rubber. It processes about 30% - 40% of its rubber locally.

~ Cashew

Côte d’Ivoire is the world’s largest producer and exporter of raw cashew nuts.

However, Vietnam remains the largest exporter of processed cashew kernels. Take note, Vietnam imports massive quantities of raw cashews nuts from Côte d'Ivoire to fuel its cashew processing industry.

Again, the processing, and therefore the premium margins, occur elsewhere.

All of this shows that there are enormous opportunities within Africa’s manufacturing and industrial landscape.

Value addition is not optional - it is necessary.

If we process our raw materials locally, we would:

• Boost export income

• Create jobs

• Increase agricultural earnings

• Stimulate industrial advancement

• Build economies of scale

• Reduce waste

• Stabilize economies against volatile commodity prices

• Strengthen economic growth and long-term stability

There must be deliberate and sustained support for local manufacturing industries, especially small and medium manufacturing industries. Otherwise, we will continue shipping away raw wealth while using the foreign exchange earned to import finished goods.

We have to act - strategically and decisively.

Else,

- We will produce food but remain hungry.

- Prices of goods we can produce locally will continue to rise.

- We will remain consumers in industries where we should be producers.

We must look inward. We must invest in our nations. We must lock wealth within the continent.

The fluctuation in raw commodity prices is inevitable. But value addition cushions the impact.

Africa does not lack resources.

Africa does not lack production capacity.

Africa lacks retained value.

The question is no longer whether we can.

The question is whether we will.

Data Sources:

United Nations Conference on Trade and Development. (n d.). Key statistics and trends in regional trade in Africa. (UNCTAD/DITC/TAB/2019/3). https://unctad.org/publication/key-statistics-and-trends-regional-trade-africa 

Africanews. (2024, August 13). Côte d’Ivoire wants to capture greater share of cocoa value chain. https://www.africanews.com/2022/10/03/cote-divoire-wants-to-capture-greater-share-of-cocoa-value-chain/

Observatory of Economic Complexity. (n.d.). Cotton trade – Mali (MLI). https://oec.world/en/profile/bilateral-product/cotton/reporter/mli

Swiss Federal Department of Foreign Affairs. (2025, July 16). Switzerland-Ghana bilateral relations. https://www.eda.admin.ch/countries/ghana/en/home/switzerland-and/bilateral-relations.html

United Nations Development Programme. (n.d.). Ghana sustainable cocoa. https://www.undp.org/foodsystems/ghana-sustainable-cocoa

African Exponent. (2025, August 10). Top 10 cotton producers in Africa 2025. https://www.africanexponent.com/top-10-cotton-producers-in-africa-2025/

Ambassade du Mali au Japon. (n.d.). Agriculture and investment in Mali. https://www.ambamali-jp.org/eng/investment/agriculture/

Yara International. (2025, May 21). Supporting tea growers in Kenya. https://www.yara.com/knowledge-grows/supporting-tea-growers-in-kenya/

United States Department of Agriculture Foreign Agricultural Service. (n.d.). Brewing report. https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Brewing

Observatory of Economic Complexity. (n.d.). Tea trade - Kenya (KEN). https://oec.world/en/profile/bilateral-product/tea/reporter/ken

Observatory of Economic Complexity. (n.d.). Nigeria country profile. https://oec.world/en/profile/country/nga

Business Insider Africa. (2026, February 12). Nigeria retains Africa’s top oil producer status despite missing OPEC quota. https://africa.businessinsider.com/local/markets/nigeria-retains-africas-top-oil-producer-status-despite-missing-opec-quota/31qtdq6

Observatory of Economic Complexity. (n.d.). Iron ore trade - South Africa (ZAF). https://oec.world/en/profile/bilateral-product/iron-ore/reporter/zaf

Trading Economics. (2026, February). South Africa imports of iron and steel. https://tradingeconomics.com/south-africa/imports/iron-steel

Tralac (Trade Law Centre). (2025, January 27). South Africa’s unpalatable steel options. https://www.tralac.org/blog/article/16650-south-africa-s-unpalatable-steel-options.html

Observatory of Economic Complexity. (n.d.). Rubber trade - Côte d’Ivoire (CIV). https://oec.world/en/profile/bilateral-product/rubber/reporter/civ

Invest-Time. (2024, August 23). Ivory Coast hevea: Good business in a fast-growing sector. https://invest-time.com/en/ivory-coast-hevea-good-business-in-a-fast-growing-sector/

Observatory of Economic Complexity. (n.d.). Rubber tires trade - Côte d’Ivoire (CIV). https://oec.world/en/profile/bilateral-product/rubber-tires/reporter/civ

World Population Review. (2026). Cashew production by country. https://worldpopulationreview.com/country-rankings/cashew-production-by-country

Cashew Information Portal. (2025, February 21). Global cashew market update. https://cashewinformation.com/news.php?newsId=5503