Achieving sustainable growth and building resilience requires structural transformation while successful industrial policies require both sectoral focus and getting the basics right, the Economic Commission on Africa (ECA)writes.
the ECA said the assertion was part of the findings of the Economic Report on Africa 2023 (ERA 2023), titled, “Building Africa’s Resilience to Global Economic Shocks” which launched on December 18, 2023, in Abuja, Nigeria.
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The report said it was essential for countries to identify optimal combinations of policy actions to nurture an industrial programme.
Presenting the report, Adam Elhiraika, ECA Director, Macroeconomics and Governance Division said the current global economic architecture affords opportunities for African countries to leapfrog and accelerate industrialization through careful experimentation of what has worked elsewhere and adapting it to local conditions.
Mr. Elhiraika, who also presented the 2023 Africa Sustainable Development Report, further explained that firm survival and growth in Africa were closely linked with exporting, working with international capital and international firms, adopting international managerial norms and standards.
According to ERA 2023, three economic fundamental gaps require attention to get the basics right: skill gaps; infrastructure gaps and overall institutional quality gaps.
On promoting regional value chains, the report states that countries can collaborate in creating, for example, regional agricultural commodity markets that will help to connect surplus economies with net importers for wheat, sugar and rice. This will reduce dependence on Russia and Ukraine.
“Financial integration could also protect the continent from the vicious cycle of debt distress and liquidity crunches through regional bond markets that would enhance savings mobilization, risk pooling and funding for regional and national infrastructure, ” the report explained.
Matthias Schmale, the UN Resident and Humanitarian Coordinator in Nigeria, represented by Nonso Obikili, an Economist in the Resident Coordinator’s Office, noted that the convergence of many crises, such as the shocks generated by the consequences of the COVID-19 epidemic, the ripple effects of the Russian invasion of Ukraine, and climate change had resulted in Africa experiencing a setback in achieving the Sustainable Development Goals (SDGs) targets.
He cited an example of the impact of shocks on poverty, in 2021, when almost 30 million Africans experienced severe poverty, and 22 million lost employments.
“The top ten countries with the highest number of poor people account for 64.7% of the continent’s poor population. The first four countries—Nigeria (100 million), the DR Congo (67 million), Tanzania (36 million) and Ethiopia (33 million)—account for 42% of the poor population,” Mr. Schmale said.
The ERA 2023 calls for new approaches for African countries to address challenges of global economic shocks. The report calls for improving risk management and building resilience strategies through well-designed national development plans and good governance, as well as structural transformation through equitable green growth and smart industrial strategies.
Tope Fasua, Special Adviser to the Nigerian President on Economic Matters, highlighted that Nigeria had experienced economic recessions which have included commodity price crashes of early 1970s after the oil boom in 1973, a recession of the 1980s due to fall in commodity prices and another recession in the mid-2000s due to crude oil crash.
“We live a life of volatility in terms of our finances, and most of Africa is still tethered to these kinds of risks,” Fasua said.
The launch was attended by representatives of the United States Embassy, European Union, USAID, Federal Ministry of Budget and Economic Planning;, the Federal Ministry of Finance, Central Bank and UN Agencies.
ECA