Nigeria and other African countries are at the epicentre of overlapping global crises – economic shocks, climate disruptions and geopolitical tensions – that compound vulnerabilities.

UN Trade and Development’s ‘Economic Development in Africa Report 2024’ highlights how economies face heightened uncertainty during major shocks, including the 2008 financial crisis, the 2014 commodity price collapse and COVID-19.

The report calls for stronger regional trade networks to reduce dependence on external markets, enhance stability, mitigate global shocks and unlock the $3.4 trillion potential of the continental free trade area (AfCFTA).

The report uses a new framework to analyse vulnerabilities across six areas: coups, governance challenges and weakened democratic institutions. Africa has seen 220 of the world’s 492 coup attempts since 1950, high debt, trade imbalances and inflation.

Nearly half of African nations had debt-to-GDP ratios above 60 per cent in 2023, with many spending more on debt interest than education or health, rapid population growth and migration pressures, dependency on fossil fuels and limited renewable infrastructure.

Over 50% of the continent’s energy supply still comes from fossil fuels, digital divides and under-preparedness for disruptive innovations, extreme weather and dependence on climate-sensitive agriculture. Climate disasters affected 110 million Africans, causing $8.5 billion in damages in 2022.

Over 50% of the continent’s imports and exports are tied to just five economies, all outside of Africa. Meanwhile, only 16 of 54 African nations source more than 0.5% of their intermediate goods within the region, missing key opportunities for value-added trade and manufacturing.

However, trading networks within Africa’s regional blocs are more diversified, with multiple countries acting as suppliers and users of value-added goods.

Stronger, more diversified trade networks reduce vulnerabilities and create growth spillovers. For example, a 1% increase in a neighbouring country’s GDP can boost growth in a landlocked country by up to 0.7%.