African countries need to reinvigorate efforts to diversify their economies in the wake of plummeting global commodity prices which have weakened local currencies across the continent and forced economies to revise GDP growth downward.

Most countries in Africa have not heeded calls to diversify economies for several decades and this is now haunting their economies.

For net exporters of commodities, output has slowed considerably because of commodity prices that have declined sharply over the past three years.

As a result, currencies of these commodity-exporting nations have also plummeted to record lows, exacerbated by the slowdown in the Chinese economy which has threatened to worsen the retreat in prices.

Robert Lynch, a currency strategist at HSBC Holdings Plc in New York recently cautioned that correlation between currencies and commodities has diminished.

“The China story is important, and so seeing some weakness in these currencies at a time when some of these commodity prices are under pressure, I certainly would put it as a factor,” he said.

China has become the biggest consumer of African commodities and the slowdown in the Asian economy has meant demand for Africa’s commodities diminished as well.

As Chinese growth slows, so has Africa’s.

The World Bank says Sub-Saharan Africa’s growth will decline from 4,6 percent last year to 4,2 percent this year as the major source of revenue for most governments decline.

According to the International Monetary Fund (IMF), the weak commodity price outlook could also subtract almost 1 percentage point annually from the growth rate of commodity exporters, from this year to 2017 as compared with 2012 /14.

The situation has not been helped by the fact that the greenback has been enjoying its fastest rise in 40 years this year as it is strengthening dramatically against all the world’s other major currencies.

Analysts say the trickle effects of low commodity prices could affect the ability of African governments to pay back debts accumulated over the past decade which were encouraged by surging commodity prices and a global appetite for high-risk debt.

In the case of Zimbabwe, Government has revised economic growth for 2015 to 1,5 percent from 3,1 percent as a poor agricultural season and lower global commodity prices take their toll on productivity.

The combination of a weakening South African rand and a strengthening United States dollar has rendered mining output uncompetitive compared to others in the region.

Mining contributes more than 15 percent of Zimbabwe’s GDP with gold and platinum exports accounting for over 80 percent of mineral exports.

Zimbabwe has the second-largest known platinum reserves after those of South Africa but producers have been groaning under the strain of low prices and high taxes. The country also produces chrome, diamonds and coal among 30 other minerals that have a potential to boost export receipts.

Zimbabwe Economic Policy and Research Unit executive director Dr Gibson Chigumira recently said the currency volatility would definitely affect platinum output.

“We have a geology that facilitates that our platinum production is very viable and competitive, but because of the devaluation in South Africa with their geology, which is worse than ours they are now more competitive than us. But it’s simply because of the change in exchange rate,” he said.

But the country has no currency of its own after it adopted a multi-currency regime in 2009, leaving the central bank with no monetary autonomy and lack of exchange rate flexibility to enhance export competitiveness.

Experts said the only way to address problems that arose from this scenario was to “look at internal processes in terms of reducing costs of production.”

The Reserve Bank of Zimbabwe in August proposed that the country should pursue internal devaluation to promote export competitiveness in the absence of its ability to effect nominal exchange rate adjustments.

Zambia’s central bank gave warnings in August that the falling price of copper was putting immense strain on the kwacha.

As the falls in the price of copper hit the country, the kwacha dropped to 10,150 last month before reaching a low of 12,134 to the dollar today.

The southern African nation derives 70 percent of export earnings from copper which accounts for 11 percent of Zambia’s gross domestic product.

The slide in global copper prices has already prompted the government to slash its economic growth forecast for this year to 5 percent, from an initial 7 percent.

And a deepening power crisis has increase pressure on the country’s mining industry, threatening output, jobs and economic growth in Africa’s second biggest producer of the metal.

Glencore, Vedanta Resources Plc and China’s NFC Africa and CNMC Luanshya Copper Mine have all said they might shut down some operations due to the harsh business environment.

But the closure of mines and smelters is likely to hit its output, which was projected to increase to 916,767 tonnes by 2018 from 741,916 tonnes in 2015.

The threat of lower revenues and the sharp slide in the kwacha has renewed pressure on Zambia to diversify its economy.

Analysts say 90 percent of the problems the country is experiencing are externally triggered and “this is a huge wake-up call that you cannot depend on an export whose price you cannot control.”

The economy of Angola is one of the most heavily oil-dependent in the world. Consequently, when the price of oil drops, the Angolan economy suffers excessively.

Angola’s gross domestic product of about $124 billion is the third biggest in sub-Saharan Africa after Nigeria and South Africa.

But Africa’s second-largest oil producer has been struggling to cope with crude prices that have slid more than 40 percent over the past year.

The price of a barrel of global oil benchmark product, Brent North Sea crude dropped to $48.61 per barrel on Monday.

Angola’s central bank has devalued its currency as the drop in oil prices cut the main source of government revenue and export earnings.

The rate for the kwanza was weakened to 130.442 per dollar in September. Currently, the kwanza is trading at 135,302 against the dollar.

Earlier this year, government had to cut its 2015 budget by 26 percent to 5,4 trillion kwanza ($46 billion).

Angolan Finance Minister Armando Manuel told the media that Angola’s financial planners had assumed crude oil would be selling for between $88 to $92 per barrel when they crafted the nation’s budget.

South Africa’s economy contracted in the second quarter, worsening the outlook for a country grappling with a plunging currency, power shortages, and a slump in commodity prices.

Gross domestic product fell for the first time in more than a year by 1.3 percent from the previous quarter. South Africa is the top exporter of platinum, coal, iron ore, gold and other minerals.

“The depreciation has occurred side-by-side with falls in commodity prices which hurt in terms of what we get for our exports,” Lungisa Fuzile, Director-General of the Treasury was quoted saying.

Government has since revised growth prospects to 1,5 percent this year.

The country has a vibrant manufacturing sector which makes up about 13 percent of the economy. However, the sector contracted by an annualised 6,3 percent in the second quarter of this year.

Like all commodity based economies, Botswana faces a similar challenge created by a drop in the sale and prices of its rough diamonds.

Diamonds account for about a third of the country’s gross domestic product (GDP), 80 percent of exports and 40 percent of the entire government’s revenues.

In 2013, the country is reported to have exported polished diamonds worth 6,6-billion pula.

The government of Botswana holds a 15 percent stake in De Beers, and is also an equal partner in the mining corporation Debswana and sorting house DTC Botswana.

But De Beers sales have slumped, with rough exports dropping 15 percent year-on-year to $1,7 billion in the first half of 2015.

The diamond cutting and polishing industry has also been affected and an estimated 1 000 jobs have been slashed in the past year as manufacturers have scaled down operations.

In August, Botswana cut its GDP growth forecast for 2015 to 2.6 percent from an earlier projection of 4,9 percent. The treasury also revised its budget to post a deficit as a percentage of GDP to 1,1 percent for 2015/16 rather than the surplus initially touted.

Nigeria, Ghana and Kenya among others, have also not been spared.

Industry experts say the problem now needs African countries to work together to find solutions that work.

In a paper titled ‘Africa needs its own version of the Airbus Project’, founder and executive chair of the Mandela Institute for Development Studies Nkosana Moyo says a more unified African market could create the scale for which investment for significant production levels would become easier to attract.

“In the southern African development community, there has been a lot of talk about industrialisation of late. This is not an unreasonable aspiration. If countries in a sub-region, say platinum producers, take a joined-up approach to the building of a sub-regional value chain for platinum, I think this will be entirely feasible,” he said.