ECA predicts commodity markets to remain volatile in Africa

Commodity markets in Africa are expected to remain volatile in months ahead following the persistence of Covid-19 constrains in the supply chain and other global economic pressures, said Stephen Karingi, Director of Regional Integration and Trade Division at the Economic Commission for Africa (ECA).

Karingi was speaking at the ECA Price Watch session with African finance ministers on ‘Commodity prices amid Covid-19: prospects and policy implications for African economies.’ This is the 5th in the series of presentation sessions of price development in a specific sector compiled and disseminated by the ECA Price Watch Centre for Africa.

He said that African economies remain largely dependent on primary commodities exports and that although the commodity sector in most African economies is a significant source of national revenues, high dependence on the sector means high vulnerability to the vagaries of international markets and volatile prices passed on to local markets.

“High commodity dependence is associated with lower human development indicator across the developing world,” said Karingi, adding “limited diversification and reliance on commodities sector are detrimental to long-term development in resource-rich countries.”