Abstract
This study examines Africa’s reliance on imported products using five criteria: market concentration, foreign demand, capacity for domestic substitution, market relevance, and product elasticity of substitution. By analyzing Africa’s imports with over 210 partners for 5,384 products between 1995 and 2022, we find that approximately 10% of the products imported into Africa, in terms of value and volume, are dependent or risky. Africa’s risky imports mainly consist of machines and electronics, transportation equipment, metals, and textiles and clothing, which are primarily intermediate products. These imports predominantly originate from Asia, especially China, which accounted for 47% of Africa’s import value of risky goods in 2022. Risky import products exhibit a lower survival rate than non-risky products, with most industries relying on them being in the automotive and transport sectors. Additionally, risky imports encounter higher tariff and non-tariff barriers than non-risky goods. Regression results suggest that risky goods were more adversely affected by the 2008/2009 global financial crisis and the COVID-19 pandemic than non-risky goods. The analysis also indicates that risky goods negatively impact Africa’s macroeconomic fundamentals—GDP, GDP per capita, inflation, and exchange rate. African countries may foster strong and diversified trade relationships and commercial partnerships with others to reduce excessive interdependencies.
