Yemisi Izuora
The African Development Bank, AfDB says Africa has recorded a stable economic performance and thus projected the Continent’s Gross Domestic Product, GDP growth to accelerate to 4.0 per cent in 2019 and 4.1 per cent in 2020.
The projection was contained in the Bank’s annual African Economic Outlook report which was launched Thursday.
However, the report adds that improved macroeconomic and employment outcomes require industry to lead growth.
The 2019 report focuses on three key areas which include Africa’s macroeconomic performance and prospects; Jobs, growth, and firm dynamism and Integration for Africa’s economic prosperity.
The Bank’s Director of Macroeconomic Policy Forecasting and Research Department, Hanan Morsy, provided participants with the report’s “storyline” and noted that in spite of a rising national debt across Africa, “there is no systemic risk of debt crisis.”
At the current rate of labour force growth, Africa needs to create about 12 million new jobs every year to prevent unemployment from rising. The report states that a “concerted industrialization effort that builds on countries’ comparative advantage,” is required.
“Manufacturing-driven growth has the highest impact on job creation,” Morsy said.
At the core of African integration, the African Economic Outlook suggests that “a borderless Africa” is one of the key foundations of a competitive continental market that could serve as a global business center.”
The Continental Free Trade Agreement (CFTA), signed in March 2018 by 44 African countries, offers substantial gains for all African countries the report says, citing new data and analytics.
“To develop cross-border supply chains, improving customs management and adopting simple and transparent rules of origin, are essential,” the report notes.
The report identifies five key trade policy actions that could potentially bring Africa’s total gains to 4.5 per cent of its GDP, or $134 billion a year.
This includes elimination of all applied bilateral tariffs in Africa, keeping rules of origin simple, flexible, and transparent and removing all nontariff barriers on goods and services.
Others are implementing the World Trade Organization’s Trade Facilitation Agreement to reduce cross border time and transaction costs tied to nontariff measures and negotiating with other developing countries to reduce their tariffs and nontariff barriers, by 50 per cent.