Landlocked Developing Countries Face Multiple Challenges in Achieving Inclusive Growth

Strategic Insights -

Landlocked developing countries (LLDCs) in Africa face numerous challenges in achieving inclusive growth and advancing structural transformation. Despite being critical to global trade, their contribution remains limited, with over 90% of their exports focused on raw materials. This predicament is further exacerbated by international rules, regulations, and environmental standards that hinder their trade and development prospects. The situation is particularly precarious for African LLDCs, which only account for 0.2% of global trade.

Key Takeaways:

  • LLDCs in Africa face significant challenges in achieving inclusive growth and advancing structural transformation, with over 90% of their exports concentrated on raw materials.
  • The contribution of African LLDCs to global trade remains limited at 0.2%.
  • International rules, regulations, and environmental standards are major obstacles to LLDCs' trade and development prospects.
  • To address their development challenges, LLDCs need to build their domestic productive capacities and move away from low-value to high-value-added production and supply structures.
  • A recent study found that international regulations can further complicate LLDCs' access to main export markets, acting as potential non-trade barriers.
  • The new Programme of Action for LLDCs aims to foster productive capacities and enhance export diversification and structural transformation in line with Priority Area 1.
  • The side event aims to exchange views on the trade and development impact of international regulations on LLDCs and seek solutions to mitigate adverse impacts.
  • LLDCs can play a greater role in international trade by building their domestic productive capacities and upgrading their supply structures.

Statistics:

  • Over 90% of exports from African landlocked developing countries (LLDCs) are concentrated on raw materials.
  • The contribution of African LLDCs to global trade remains limited at 0.2%.
  • International rules, regulations, and environmental standards are imported by over 70% of African LLDCs.
  • The price of compliance with international regulations is estimated to be around 10-20% of the total costs of export production.

Sources:

  • United Nations Conference on Trade and Development
  • United Nations Programme of Action for Landlocked Developing Countries