Africa’s challenges

©AfDB

The African economy has been enjoying an upsurge in recent years. How confident are you about the future?

Yes, the continent has seen remarkable turnaround. GDP has trebled since the Millennium, and seven of the world’s ten fastest growing economies are in Africa. We forecast at least 6% growth for 2013. But we must not confuse economic growth with economic transformation.

Now, the challenge is sustainability–the human development indicators are too low, there are still serious pockets of fragility, and continent-wide we experience the restraints of the infrastructure gap. But we have identified a number of mega-trends which, if we manage them well, make me very confident about the future: natural resources, demographics, technology–and Africa’s ability to take advantage of new global poles of growth.

We have a growing population (up by 2.2% a year, that’s double the figure in Asia), and we are rapidly urbanising (40% now, will be 70% by 2050). Geological mapping is bringing new discoveries of natural wealth; and information technology continues to leapfrog Africa forward, with the mobile phone revolution giving more access to information and lowering the costs of business.

Nonetheless, the demographic dividend is not preordained–it depends on what is done today.

What do you consider to be the two or three biggest policy challenges facing Africa’s economic development at present?

Jobs and inclusion. Although our economies grow, they don’t create enough jobs. That is why the African Development Bank has built its strategy for the period 2013 to 2022 on addressing those two big policy challenges, to ensure that already-strong growth is shared, sustainable, and job-creating. In other words, we want growth which generates opportunities for all, without depleting natural capital, terrestrial, marine and bio-diversity. Remember that the continent’s ecological imprint has grown by 250% in 50 years.

What underpins so much of this is the policy and practical challenges of filling the African infrastructure funding gap which is put at US$50 billion a year for the next 10 years, and which costs us an incredible 2% annual growth every year. Only 33% of Africans have access to sanitation, 40% to electricity, 66% to clean water– and we fall seriously short in finding cross-border solutions to our infrastructure needs.

We are working hard on solutions. The 2013 proposal to launch the Africa50 Fund (funded first and foremost by African central bank reserves and African sovereign wealth funds) is more evidence of Africa taking charge of its development destiny.

Next year marks the 20th anniversary of the Rwandan genocide. As a Rwandan yourself, what lessons do you think can be drawn for Rwanda, Africa, and indeed, the wider world? Rwanda has come a very long way, not least through its people’s efforts and the support of partners. Its journey continues, as do other countries’. What are the lessons?

I see three. First, no matter how bad the initial conditions, a country can make it if its people are determined. Second, and contrary to what one hears, foreign aid when effectively used can be useful, especially in the early phases, as was the case in Korea. Third, there is no standard toolbox to rebuild a country: history and environment play their role, but each country must chart its own course.

Visit www.afdb.org

See also www.oecd.org/dev/emea/

© OECD Observer No 296 Q3 2013




Economic data

GDP : +0.5%, Q4 2014
Employment rate: 65.9%, Q4 2014
Annual inflation : 0.60% Mar 2015
Trade : -3.0% exp, -3.7 imp, Q4 2014
Unemployment : 6.993% Feb 2015
More moderate expansion ahead? Composite leading indicators
Updated: 12 May 2015

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