UN warns commodity-dependent economies at risk without urgent diversification

A new UN report has sounded the alarm on the continued overreliance of developing countries on commodity exports, warning that without strategic value addition and economic diversification, many risk fiscal instability and missed development opportunities.

According to The State of Commodity Dependence 2025 published by the United Nations Conference on Trade and Development (UNCTAD), two-thirds of developing countries – 95 out of 143 – remained commodity-dependent between 2021 and 2023, deriving more than 60 percent of their export earnings from primary products such as oil, metals, and agricultural goods.

The report shows that commodity dependence remains deeply entrenched in structurally vulnerable regions. More than 80 percent of least developed countries and landlocked nations fall into this category, with Middle and Western Africa particularly exposed. In some cases, primary goods account for over 80 percent of national export revenues.

While global commodity trade still matters—accounting for 32.7 percent of international trade by value in 2021–2023—that figure has slipped from 35.5 percent a decade earlier. Energy exports, still dominant, have declined in share due to oil price shifts and the rise of renewable energy. Meanwhile, agriculture and mining exports are on the rise, though they remain unprocessed in many exporting nations.

Africa’s own commodity exports dipped 5.6 percent over the decade, largely due to declining oil exports from Nigeria, Angola and Algeria. Gains in agriculture and mining were not enough to offset the losses.

UNCTAD points to countries like Indonesia and Guatemala as examples of success, having reduced their dependence through targeted investment, expanded market access and industrial policy.

With commodity markets facing volatility and growing pressure for green transitions, the report urges governments to rethink their approach—shifting from extraction to transformation—to unlock sustainable growth.

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