A recent report by the United Nations Conference on Trade and Development (UNCTAD) has ranked African countries based on their exposure to economic shocks, with Mozambique, Zambia, Angola, South Sudan, and the Republic of the Congo emerging as the most vulnerable. The report, titled "Economic Development in Africa 2024: Unlocking Africa's Trade Potential – Boosting Regional Markets and Reducing Risks," provides a comprehensive framework for African countries to analyze their exposure to economic shocks, with a particular focus on trade and investment.

Economic shocks refer to sudden and significant disruptions to an economy, which can have a substantial impact on economic activity, growth, and stability of a nation. According to Rebeca Grynspan, Secretary-General of UNCTAD, "African economies are persistently exposed to a range of external shocks due to commodity dependency, high levels of debt, and limited technological infrastructure and connectivity."

The report notes that many African economies are highly vulnerable to global price fluctuations due to their heavy reliance on exports. Countries with significant trade-to-GDP ratios, concentrated exports, and substantial government debt remain particularly exposed to ongoing global economic instability. In 2023, 46% of African countries had debt-to-GDP ratios exceeding 60%, which is attributed to factors such as excessive borrowing, economic mismanagement, political instability, and reliance on volatile commodity exports.

The lack of economic diversification in many African countries means that they are often unable to withstand external shocks, as they lack alternative sectors to drive economic growth. This dependence on a narrow range of exports makes their economies highly susceptible to fluctuations in global commodity prices. For instance, a decline in oil prices can have devastating effects on the economies of oil-exporting countries like Nigeria and Angola.

The report identified the following countries as the most vulnerable to economic shocks due to trade dependency and high external debt: Mozambique, Zambia, Angola, South Sudan, and the Republic of the Congo. The ranking is based on trade share, export concentration, and external debt. The top 10 countries most exposed to economic shocks are:

1. Mozambique - 43.9 2. Zambia - 33.6 3. Angola - 33.6 4. South Sudan - 33.6 5. Congo - 33.3 6. Libya - 32.6 7. Cape Verde - 31.1 8. Seychelles - 29.3 9. Lesotho - 28.9 10. Guinea-Bissau - 25.9

The report's findings highlight the need for African countries to build resilience and diversify their economies to reduce their exposure to economic shocks. As Grynspan noted, building resilience will allow the continent to reap the many opportunities offered by its future.

The report's analysis and recommendations are crucial for African countries to navigate the complex global economic landscape and mitigate the risks associated with economic shocks. By understanding the nature of their exposure to economic shocks, African countries can develop strategies to reduce their vulnerability and promote sustainable economic growth.

The UNCTAD report serves as a timely reminder of the need for African countries to prioritize economic diversification, reduce their dependence on commodities, and invest in technological infrastructure and connectivity. By doing so, they can reduce their exposure to economic shocks and create a more stable and prosperous economic future.