Innovate to Diversify: An Imperative to Fully Benefit from the AfCFTA

The African Continental Free Trade Area (AfCFTA) is opening up a market of 1.3 billion consumers and a cumulative GDP of USD 3.4 trillion, offering a historic opportunity to accelerate the continent’s growth and integration. However, from my firsthand observation as a committed African, without a profound paradigm shift—particularly prioritizing research and technological innovation—our economies risk failing to seize this opportunity to the fullest. As things stand, our economies’ structure, which is overly dependent on raw materials and insufficiently focused on technology, limits our capacity to diversify our production, increase local added value, and capitalize on intra-African free trade. In this article, I explain why greater investment in innovation is crucial to overcoming Africa’s structural challenges, drawing on recent studies, compelling statistics, and concrete sectoral examples. I do so in a technical yet accessible tone, transparently presenting the facts, and with the personal conviction that drives me as a candidate for the ETTIM Commissioner position.

Dependence on Raw Materials: A Barrier to Diversification

First, we need to take a clear-eyed look at the current situation. Today, most African countries remain dependent on exporting basic commodities, whether minerals, oil, or raw agricultural products. According to the latest UNCTAD report, 83% of African countries are classified as “commodity dependent,” meaning that unprocessed raw materials account for more than 60% of their export earnings. This status applies to 46 of the continent’s 55 states. Such a concentration severely exposes our economies to fluctuations in international commodity prices and external shocks. Indeed, countries reliant on raw materials often experience unstable growth and heightened vulnerability to crises: 90% of the least developed African countries are commodity-dependent, and this dependence often correlates with low human development indicators. In other words, natural resource rents have not been enough to sustainably enrich our populations.

This dependence is reflected in the very structure of our trade. Africa still finds itself at the lower end of the global value chain: its share in global manufacturing production is only about 1.9%. Our exports are dominated by raw goods, while we import most high-value-added products. Between 2011 and 2022, manufactured products constituted only 18.5% of Africa’s exports, whereas they made up 62% of our total imports. This trade imbalance impoverishes the continent by preventing it from capturing the added value along production chains. Concretely, we export oil and import refined fuel; we export cocoa and import chocolate; we sell cotton and buy clothing. One telling example: Côte d’Ivoire and Ghana together produce more than half of the world’s cocoa, yet farmers receive only 3% to 6% of the price of a chocolate bar paid by a Western consumer. The remainder of the margin goes to those who process the bean into finished products—generally outside Africa. Likewise, Africa accounts for about 75% of the world’s cocoa production but nearly 0% of the world’s chocolate production. This situation illustrates the lack of local value addition to our resources: in the absence of processing industries and local innovation, we let the majority of the wealth created flow to other regions.

The negative impacts of this primary specialization are also evident in intra-African trade. In the absence of a diversified industrial base, trade between African countries remains very low. It represents only about 15% of Africa’s total trade, far behind intra-regional trade in Europe (70%) or Asia (60%). The AfCFTA aims precisely to boost this figure by eliminating tariff and non-tariff barriers. However, liberalizing trade alone will not suffice if all countries export the same raw materials: increasing intra-African trade requires each economy to offer a broader range of competitive goods and services. Yet without a deliberate effort to industrialize and diversify, there is a risk that only a few already-industrialized economies will benefit from the AfCFTA, while others continue to import manufactured goods—simply from a neighboring African country instead of a country outside Africa. As African Development Bank President Akinwumi Adesina recently pointed out, no nation or region has ever developed merely by exporting raw materials. Rapidly diversifying our economies and adding value to everything we produce is, therefore, essential if Africa is to break free from the cycle of vulnerability and poverty.

Innovation: An Essential Driver of Production and Growth

How, then, to initiate this long-awaited diversification? Economic history and contemporary data converge on the answer: by innovating and investing in knowledge. Technological innovation is the primary driver of productivity and sustainable growth. An IMF study highlights that the number-one factor in long-term GDP growth, whether in developed or developing countries, is innovation. African economies that have experienced the fastest growth in recent years—such as Côte d’Ivoire, Rwanda, or Ethiopia—are precisely those that have begun to further diversify their exports and improve their competitiveness by focusing on new industries. Conversely, countries that remain specialized in just a few natural resources act as “passive globalizers,” to use researchers’ terminology, meaning they are passive participants in globalization, subject to external shocks and serving merely as suppliers of raw materials to innovative nations. They remain trapped in cycles of volatile growth and balance-of-payments crises, while “active globalizers” diversify and move up the value chain. The difference largely comes down to the capacity to innovate and enhance production efficiency.

Unfortunately, Africa lags significantly in terms of research and development (R&D) investment, undermining its ability to innovate. The numbers are telling: Sub-Saharan African countries devote on average just 0.32% of their GDP to R&D, compared to a global average close to 2%. That is almost six times less than the average in East Asian countries, for instance. The African Union set a minimum goal of 1% of GDP for R&D spending, but few countries achieve this. Only three countries in Sub-Saharan Africa—South Africa, Kenya, and Senegal—come close to this 1% threshold in the latest available data, at around 0.8%. In North Africa, few nations exceed 0.5% (Tunisia stands out at around 0.7–0.8%). By comparison, South Korea or Israel invest more than 4% of their GDP in R&D. This chronic underinvestment translates into a lack of research infrastructure, laboratories, corporate innovation programs, and scientific personnel.

This last point is crucial: Africa suffers from a shortage of researchers and engineers. On average, there are only 98 researchers per million inhabitants in Sub-Saharan Africa, compared to more than 1,300 globally, nearly 1,800 in East Asia, and over 4,000 in North America or Europe. Concretely, this means our continent has far fewer people fully dedicated to creating new knowledge and technologies. Fewer researchers mean fewer patents, fewer innovations, and ultimately fewer new products “made in Africa.” Indeed, Africa’s innovation capacity remains limited in global indicators. In 2020, all African inventors combined filed only about 20,000 patents, barely 0.1% of the global total, while Asia filed more than 590,000 that same year.

This situation illustrates the continent’s lag in formal innovation. In 2020, residents of African countries filed just over 20,000 patents, whereas residents of Asia filed more than 700,000 in the same year. Even adding patents filed in Africa by non-residents (often foreign companies protecting their inventions in our markets—the brown bar), the total remains below 30,000 patents in Africa, compared to over 800,000 in Asia. This enormous gap highlights our lack of local innovation. It is partly explained by the difficulties and costs involved in innovating on the continent: paradoxically, filing a patent in African countries like Kenya, Chad, Senegal, or Côte d’Ivoire can be more expensive than in Europe or North America when measured against our income levels. A patent can cost the equivalent of 13 times per capita GDP in Kenya, compared to just 0.1 times in the United States. These obstacles discourage innovative entrepreneurship and contribute to the brain drain from our continent.

As a result of this low investment in science and technology, Africa struggles to move from a rent-based economy to a production-based one. Our production structures evolve too slowly. Manufacturing value added—that is, the wealth created by processing industries—has hovered around 10 to 12% of African GDP for decades. In 2022, the manufacturing value added for the entire African continent was estimated at only USD 180 billion (less than 10% of the continent’s GDP)—less than the manufacturing value added of individual countries like Mexico or South Korea. Certainly, there has been progress in a few countries, but overall, Africa has not yet undergone the massive industrialization seen in parts of Asia or the Americas. As noted by the AU Commission and AUDA-NEPAD, our exports remain “stagnant and heavily concentrated in primary products,” explaining that despite trade agreements, Africa’s share of global exports has fallen to around just 2–3%. In other words, without innovation, we do not produce enough competitive goods to export and miss out on global market opportunities.

Strategic Sectors to Transform Through Technology

The picture outlined above is not inevitable. Many sectors offer the opportunity to move up the value chain through innovation—provided we commit to doing so. Below are a few key domains where increased technological investment can make all the difference in Africa’s ability to diversify and produce more locally.

Agriculture and Agro-Industry: It is a frequently cited paradox: Africa holds 60% of the world’s uncultivated arable land and has a large agricultural workforce, yet it imports tens of billions of dollars’ worth of processed food each year. The reason? A lack of innovation and industrialization in our agrifood sectors. Let us return to the example of cocoa: innovation could enable the development of an African chocolate industry, creating jobs and local added value. This would involve modernizing processing methods, accessing conservation and packaging technologies, improving logistics, etc. Similarly, in coffee, cotton, cashew nuts, and tropical fruit chains—sectors in which we excel—there is enormous potential for local processing. African countries that have invested in agro-industry, such as Morocco (diversified agrifood) or, more recently, Ethiopia (textile and leather factories), have seen new exports emerge and local business ecosystems flourish. Agricultural technology (AgriTech) can also play a role upstream: new, more productive seeds, precision irrigation, drone use in agriculture, and mobile applications providing information to farmers are innovations that improve yields and quality, paving the way for commercially viable surpluses that can be processed. By investing in agronomic and agro-industrial research, we can break out of the pattern where others do the processing and packaging of our tropical goods. Initiatives such as those in Ghana and Côte d’Ivoire, which are trying to establish a minimum price for cocoa and develop local grinding facilities, or Nigerian and Kenyan agrifood startups beginning to export finished “Made in Africa” products (juices, instant coffee, chocolate, etc.) are encouraging. But to scale up these examples, public support for innovation is essential—through technical centers, funding, and the intellectual property protection of our recipes and brands.

Energy and Mineral Resources: The African subsoil is rich in critical metals and minerals—cobalt, lithium, rare earths, copper, manganese, etc.—that are essential for green technologies and global industry. Yet we still mostly export these minerals in raw form, only to import the finished products (batteries, solar panels, smartphones, electric vehicles, etc.) at a high price.

Technological innovation can help us capture a much larger portion of the mining value chain. For instance, lithium-ion batteries that power electric cars and energy storage could be partly produced in Africa. Countries like the Democratic Republic of Congo or Zambia, rich in lithium, cobalt, and copper, could move beyond simply exporting concentrate to manufacturing battery components. This requires the transfer of expertise, building cathode factories and cell assembly plants, etc., which is possible if we establish technological partnerships and train the right engineers. Similarly, West African countries (Liberia, Côte d’Ivoire) that produce natural rubber could develop a tire industry on the continent rather than exporting latex to Asian factories.

Mining and petrochemical industrialization—refining oil, smelting and refining minerals, manufacturing alloys—is a crucial aspect of diversification. It goes hand in hand with investment in processing technologies (e.g., green chemistry, advanced metallurgy, recycling processes). Some countries are leading the way: South Africa has an industrial base in chemistry and metallurgy, Algeria and Egypt have developed petrochemicals, and Botswana has invested in locally cutting its diamonds. But we must go much further across the entire continent, taking advantage of growing demand for “green” products. For example, with the global rise of renewable energy, our reserves of silicon and rare earths could enable us to locally manufacture solar panels and wind turbines. Here again, this requires creating innovation hubs in renewable energy technologies—a path South Africa and Morocco have begun (solar research centers, panel assembly plants). Innovation also needs to address the energy infrastructure itself: a reliable power grid is essential for any industrialization. Investing in smart grids, energy storage, and predictive maintenance through IoT sensors—these are niches where technology can overcome structural constraints (power outages) that have hampered our production until now.

Health and the Pharmaceutical Industry: The COVID-19 pandemic was a wake-up call, revealing Africa’s extreme dependence on medical and pharmaceutical products. At the height of the crisis, the continent struggled to obtain tests, protective equipment, ventilators, and of course vaccines, because we produced almost none of these locally. One statistic illustrates this dependence: Africa imports 99% of its vaccines. In other words, fewer than 1% of the vaccines administered to Africans are produced on the continent. This critical situation led the African Union to launch a plan aimed at producing 60% of Africa’s vaccines locally by 2040. This requires building factories, training researchers, forging partnerships with major international laboratories, and above all boosting African biomedical research. Encouraging initiatives include the Institut Pasteur in Dakar (producing vaccines), Biovac in South Africa, and genomics centers of excellence in Nigeria and Kenya. Investing in medical innovation will save lives and spur economic growth, given that healthcare spending rises with the growth of the middle class. Local production of generic drugs, vaccines, diagnostic kits, or even simple medical devices (syringes, gloves, masks, etc.) should be a top industrial priority. Beyond political will, this requires strengthening our pharmaceutical R&D capabilities—for example, through partnerships between universities, hospitals, and companies to develop treatments suited to Africa’s endemic diseases (malaria, Lassa fever, etc.). The good news is that some countries like Egypt, Morocco, or Tunisia already have a foothold in the pharmaceutical industry with generic drug plants; this base needs to be extended across the continent. By harmonizing regulations and enlarging the market, the AfCFTA can foster the rise of African pharmaceutical champions capable of serving the entire continent if they are supported technologically.

Digital Economy and Innovative Services: Innovation is not limited to manufacturing; it also applies to services, a sector where Africa is starting to show dynamism. The continent has already made a global impact in mobile financial services, exemplified by Kenya, where nearly 50% of monetary transactions occur via mobile money (M-Pesa and others). This frugal innovation, originating in East Africa, has made waves and helped financially include millions of people. It demonstrates that with smart use of technology, one can circumvent failing infrastructure (in this case, a lack of physical banks) and create entirely new sectors. Similarly, we see African startups proliferating in e-commerce, logistics, e-health, edTech, and transport apps (think SafeBoda in Uganda, Yego in Rwanda, Jumia operating in multiple countries, etc.). These digital businesses are starting to attract significant investment—more than USD 5 billion in venture capital was raised by African startups in 2022. To sustain this trend, we must invest in infrastructure (broadband internet, electricity access), but also in digital skills training and intellectual property protection (software registrations, patents, etc.) to retain and monetize our digital innovations. The AfCFTA will include a protocol on digital trade, which should facilitate the cross-border expansion of these innovative services throughout the continent. Imagine an African telemedicine or e-learning application conquering dozens of unified national markets: this is possible if the regulatory framework is harmonized and entrepreneurs receive support (pan-African incubators, investment, etc.). Services already account for more than 50% of Africa’s GDP, and digital technology can greatly increase their productivity. Still, we must remember that much of this technological progress (smartphones, cloud servers, etc.) ultimately depends on hardware that we did not design or manufacture. Hence the importance of not neglecting “hardware” innovation (basic microelectronics, advanced manufacturing, etc.), so we do not rely solely on imports for our digital revolution.

All these sectors—agriculture, mining, energy, health, and services—lead to the same conclusion: without endogenous innovation, there will be no sustainable economic diversification. Innovation is the missing link that connects Africa’s abundant raw potential (natural resources, a young population, a growing market) with the creation of added value and skilled jobs on the continent. Every dollar invested in scientific research, in training an engineer, or in building a technology center is a dollar invested in our future ability to produce locally what we consume, and to export what we design. This is how we can break the vicious cycle of dependence and enter a virtuous cycle of shared prosperity.

The AfCFTA as a Catalyst—But Only If We Are Prepared

Let us come back to the African Continental Free Trade Area, the grand project that inspires so much hope. The AfCFTA is not an end in itself but an incentive framework: it will gradually remove 90% of customs duties between African countries and cut other barriers, thereby lowering the cost of accessing regional markets. If fully implemented, the AfCFTA could increase regional income by 7% (USD 450 billion) by 2035 and lift 30 million people out of extreme poverty. It could also boost intra-African exports by 81% by 2035, especially in manufactured goods. These forecasts are promising, but they assume our countries can produce competitive goods and services to fuel this increase in trade. One only gains from an expanded market if one has something to sell efficiently. Hence the need for a paradigm shift: without structural transformation of our economies, the AfCFTA might deliver only marginal wealth redistribution or even widen the gap between exporters of processed goods and exporters of raw materials.

In short, trade liberalization without building productive capacity is not enough. As the World Bank states, “creating a continental market requires determined efforts to reduce all trade costs, but the countries able to accompany these reforms by enhancing the productivity and innovation of their firms will reap the most benefits.” This means that each state must take actions complementary to the AfCFTA: investing in infrastructure (transport, energy, telecoms) to facilitate trade logistics, improving access to credit for entrepreneurs, harmonizing standards and regulations, and most importantly supporting local innovation so that our SMEs can move up the value chain. Phase II of the AfCFTA, which covers investment policies, competition, and intellectual property, will be decisive in this regard. For instance, establishing a harmonized pan-African intellectual property regime will reduce the costs and complexities of protecting innovations across countries, removing a barrier we identified earlier. Likewise, coordinated policies to attract foreign direct investment to industry (rather than extraction) can direct capital toward the high-value-added sectors we seek to develop.

The AfCFTA also offers the chance to build regional value chains. Not every country needs to produce everything from A to Z; by facilitating the free movement of goods, they can specialize in complementary segments. One could envision an African automotive ecosystem in which one country manufactures electronic components, another assembles vehicles, another supplies steel and leather, etc., collectively serving the continental market. This requires regional industrial coordination and developing specialized skills in each node of the chain. Innovation is crucial for adapting imported technologies to local realities—what some call “adaptive innovation.” East Asia managed this in its own time, importing Western technologies, then improving and deploying them at scale domestically. Africa must do the same, leveraging the AfCFTA as a giant laboratory where our entrepreneurs can test products on a market of hundreds of millions of customers, refine their models, and grow before targeting global markets.

The AfCFTA can be the catalyst for the economic transformation of our countries, but only if we simultaneously undertake the challenge of innovation and research. Otherwise, free trade may primarily benefit the economies that already have diversified industrial bases, exacerbating regional disparities. Conversely, a collective effort to strengthen innovation in all countries could yield shared growth, where even those that are less industrialized today find their niche (for example, agricultural technologies in farming-focused nations, mobile applications in countries with a large connected youth population, mineral processing in resource-rich areas, etc.). The challenge, therefore, is twofold: implement the AfCFTA and, in parallel, pursue this paradigm shift toward a knowledge-based economy.

Conclusion: My Commitment to an Innovative and Prosperous Africa

As a candidate for the position of Commissioner for Economic Development, Industry, Trade, Tourism, and Mines (ETTIM) at the African Union, I am fully aware of the magnitude of the challenge before us, as well as the urgency to address it. Recent reports and studies that I have cited paint a clear picture: without innovation, Africa will not achieve sustainable economic diversification; and without diversification, the AfCFTA will not deliver on its promises of prosperity. It is time to embrace a new development model rooted in science, technology, and entrepreneurship. Concretely, this means significantly increasing R&D budgets, supporting our universities and research centers, fostering synergies between researchers and industry, creating an environment where innovators (especially young ones) can emerge and protect their inventions, and establishing balanced international partnerships for technology transfer.

If I have the honor of serving as ETTIM Commissioner, my commitment will be to place innovation at the heart of all our economic policies. I pledge to promote initiatives such as: an African Innovation Fund, financed by states and partners, to support strategic technology projects; networking African technology hubs of excellence (from Dakar to Nairobi, Cairo to Cape Town) so they can share knowledge and equipment; harmonizing regulations on startups and intellectual property at the continental level to create a genuine common innovation market; supporting industrial SMEs through incubators, mentoring, and easier access to bank financing and venture capital; and, of course, integrating all of this with the AfCFTA’s programs so that our trade negotiations fully account for technological development.

I am convinced that Africa has the talent, entrepreneurial energy, and resources needed to make this qualitative leap. What is needed is bold vision and concerted action to break free from outdated models. We must invent a new Africa, made by Africa—“Made in Africa.” An Africa capable of feeding its population with its own agrifood innovations, of treating its citizens with its own vaccines and medicines, of connecting its villages with its own digital solutions, and of exporting to the entire world not just oil, cocoa, or metals, but high-value-added products and services derived from African ingenuity. As an ETTIM commissioner candidate, I offer all my experience and determination to achieve this goal: making the AfCFTA a success by equipping Africa with the technological means to realize its ambitions, thus ushering in a new era of prosperity and pride for our continent. This is my commitment, firmly resolved to move from words to deeds so that Africa can finally reap the benefits of its resources and the labor of its youth through innovation and economic unity. I believe in an Africa that innovates, that produces, and that wins—and I will tirelessly champion this vision.

Sources Cited: Studies and reports by UNCTAD, the World Bank, the IMF, UNESCO, the United Nations, and the African Development Bank, as well as various recent analyses on the AfCFTA, innovation, and the African economy. The data and examples presented draw notably on the 2024 Economic Report on Africa by UNCTAD, UNESCO’s research statistics, articles by the Brookings Institution, Foresight Africa 2020/2024, IMF publications (Finance & Development), African Development Bank documents, and sector-specific press releases and studies (on agro-industry, pharma, etc.) shedding light on the challenges and opportunities of structural transformation on the continent. All these references underscore the same message: the urgent need to invest in human capital, science, and technology to build the resilient and prosperous Africa of tomorrow. My convictions and my agenda for ETTIM are thus reinforced—and I invite everyone, from policymakers to citizens, to join this movement of renaissance through innovation. Forward to a new, diversified, and innovative Africa!