Commodity Dependence Runs Deep. Developing Countries Must Add Value to Turn the Tide

Shutterstock/Sunshine Seeds | Platinum mining in Rustenburg, South Africa.

Commodities are a vital engine for global trade, contributing one-third of the total value. But it’s value addition that holds the key to more diverse and resilient economies.

Platinum mining in Rustenburg, South Africa.
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© Shutterstock/Sunshine Seeds | Platinum mining in Rustenburg, South Africa.

The world still has a long way to go in breaking commodity dependence, a situation where a country makes more than 60% of its merchandise export earnings from commodities.

Such goods can be broadly categorised into three categories: energy, mining and agriculture – be it the wheat or coffee that we consume, or metals like copper and lithium that help power our daily lives.

But entrenched reliance on these primary products, long been of global concern, hinders industrial development and threatens countries’ fiscal stability when global prices go volatile.

Alarmingly, commodity dependence is prevalent across structurally weak and vulnerable economies, affecting more than 80% of least developed countries and landlocked developing countries, and roughly 60% of small island developing states.

More broadly across developing countries, two-thirds of them – 95 out of 143 – remained commodity dependent during 2021 and 2023, according to the latest edition of The State of Commodity Dependence report released by UN Trade and Development (UNCTAD) on 21 July.

The dependence is particularly heightened in Middle and Western African countries, most of which earned over a staggering 80% of their export revenues from primary commodities.

Similar patterns also showed up in Central Asia and South America, where resource wealth plays a central role in trade.

The report warns that without more efforts to diversify economies and add value, countries risk squandering opportunities to translate their raw material wealth into engines of sustainable and resilient growth.

Commodity trade still matters, but to a slightly lesser extent

Commodity exports remain central to the global economy, accounting for 32.7% of international trade in value terms between 2021 and 2023, slightly down from 35.5% a decade earlier.

Comparing the same periods, the value of world trade in goods went up 25.6%, while that of commodity trade expanded relatively slowly at just 15.5%.

The shift underscores that countries mainly exporting raw materials could miss out on the broader benefits of global trade, increasingly driven by diversification, innovation and value-added production.

The share of commodity exports in global trade went down slightly over the past decade.

World merchandise trade versus commodities trade, trillions of dollars, 2012–2014 and 2021–2023

510152025

35.5 per cent
32.7 per cent

Sectoral analysis: Energy down, agriculture and mining up

Energy products continued to dominate global commodity trade, making up 44.5% of the total value during 2021-2023.

But that share was significantly smaller than a decade before at 52.1%, largely due to lower oil prices and shifting energy demand, including the transition to renewable sources, reshaping global trade flows.

Meanwhile, agricultural commodity exports grew by 34% to reach $2.3 trillion, most of which came from food items.

Mining products, such as minerals, ores and metals, followed closely with a 33.4% increase in export value, averaging $1.65 trillion annually during 2021-2023.

Commodity dependence by the dominant export product group

Per country, percentage, 2021–2023

Chart
Map of an unspecified region with 6 data series.
Source: UN Trade and Development (UNCTAD), 2025
Note: Data in light grey is not available. Map disclaimer, https://unctad.org/map-disclaimer
End of interactive chart.

Commodity exports: Asia in the lead while Africa’s position weakens

Between 2021 and 2023, Asia and Oceania maintained their position as the world’s largest source of commodity exports, comprising 37.1% of the global total.

Western Asian countries contributed a significant share, with the United Arab Emirates and Saudi Arabia responsible for more than half of the sub-regional total.

In contrast, Africa’s commodity exports were down 5.6%, primarily due to a decrease in energy products from Nigeria, Angola, and Algeria, all leading oil exporters on the continent.

As a result, Africa’s total earnings from commodity exports fell by over $25 billion from a decade before, offsetting growth in the agricultural and mining sectors.

Asia and Oceania lead in commodity exports globally

Geographical distribution of international commodity exports, billions of dollars and share of the global total, 2012–2014 and 2021–2023

Table with 5 columns and 23 rows. (column headers with buttons are sortable)
Asia and Oceania 2 314 2 634 37.6% 37.1%
  Central Asia 102 83 1.7% 1.2%
  Eastern Asia 273 368 4.4% 5.2%
  Southeastern Asia 448 520 7.3% 7.3%
  Southern Asia 227 241 3.7% 3.4%
  Western Asia 1 020 1 031 16.6% 14.5%
  Oceania 244 390 4.0% 5.5%
Europe 2 066 2 395 33.6% 33.7%
  Eastern Europe 588 587 9.6% 8.3%
  Northern Europe 426 519 6.9% 7.3%
  Southern Europe 235 323 3.8% 4.5%
  Western Europe 817 966 13.3% 13.6%
Americas and the Caribbean 1 275 1 610 20.7% 22.7%
  Northern America 661 932 10.8% 13.1%
  Caribbean 19 13 0.3% 0.2%
  Central America 110 129 1.8% 1.8%
  South America 485 536 7.9% 7.5%
Africa 494 467 8.0% 6.6%
  Northern Africa 142 125 2.3% 1.8%
  Eastern Africa 36 51 0.6% 0.7%
  Middle Africa 111 85 1.8% 1.2%
  Southern Africa 67 87 1.1% 1.2%
  Western Africa 138 118 2.2% 1.7%

With the right policies, economic transformation is possible

The State of Commodity Dependence 2025 report provides updated statistical profiles of 195 UNCTAD member states, exploring how their commodity exports and imports have changed between 2021-2023 and 2012-2014.

While 99 countries remained commodity-dependent, the total number of countries in this category has declined slightly from 106 to 103 between the two periods studied.

Notably, countries such as Indonesia and Guatemala have successfully reduced their commodity dependence below the 60% threshold, demonstrating that a combination of targeted policies, strategic investment and expanded market access are conducive to building more diversified and resilient economies.

The report series, available biennially, serves as a tool for change in this direction, helping countries identify the risks and opportunities linked to commodity wealth.

Armed with the much-needed data, policymakers, economists and development partners can better assess vulnerabilities, harness opportunities and design effective strategies for economic diversification, value addition and sustainable development.

African Eye Report

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