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Africa Must Ponder Export Diversification: UN

FILE: A woman gathers maize she harvested in Epworth, on the outskirts of Harare, Zimbabwe Tuesday, 10.16.2012

The African economies are susceptible to a triple shock, according to the United Nations Conference on Trade and Development, which urged governments to encourage the development of new startups that would reduce reliance on commodities.

The secretary-general of the UN trade body said that sub-Saharan Africa is currently one of the world's regions most exposed to the current crisis in Ukraine.

Rebeca Grynspan, the head of the UN Conference on Trade and Development (UNCTAD), said at the launch of the body's latest Africa report that "One out of two Africans -- that means over 600 million people -- are severely vulnerable to food, energy and finance shocks, all at once."

The report advocated shifting away from conventional service industries like travel and transportation as well as commodity exports, which continue to be a major source of revenue for many African economies, in favor of more knowledge-based services.

"We have been talking about diversification as long as I can remember, and how Africa can diversify its economy, and the fact is that we've been looking at it through the lens of diversifying within the commodity sector," said Paul Akiwumi, a director with UNCTAD.

Akiwumi cited developing e-mobility, agritech, fintech, healthtech, and other tech-focused industries in African nations.

"Africa has a growing educated middle class who need these jobs, and these types of small and medium size enterprises," he added.

Akiwumi said governments must provide entrepreneurs the necessary regulatory frameworks, as well as training and capacity building.

He also said they must implement the African Continental Free Trade Area (AfCFTA) agreement, a trade pact that came into force last year, to scale up developments across the continent.