Africa’s growth prospects remain steady – AEO

Africa map

Africa map

Africa’s general economic performance continues to recover and gross domestic products (GDP) growth is projected to accelerate to 4.0 per cent in 2019 and 4.1 per cent in 2020.

But improved macroeconomic and employment outcomes require industry to lead growth, according to the 2019 African Economic Outlook (2019AEO) report, launched last Thursday by the African Development Bank and copied to the Ghana News Agency.

Published annually since 2003, the AfDB’s flagship report provides headline numbers on Africa’s economic performance and outlook.

The focus of the 2019 report on regional integration for Africa’s economic prosperity, highlights integration for trade and economic cooperation and the delivery of regional public goods.

In his opening remarks to diplomats, government officials, policy makers and students gathered at the bank’s Babacar Ndiaye auditorium in Abidjan, Cote d’Ivoire, Senior Vice President Charles Boamah said even though the report presents daunting challenges, “Africa has the means to overcome them by joining hands together and removing barriers to integration and drivers of migration”.

Guest speakers included Kanny Diallo, Minister of Planning and International Cooperation for the Republic of Guinea and Alma Oumarou, Minister and Special Advisor to the African Union Champion for Regional Integration.

The 2019 AEO report analyses gains of regional public goods, including synchronising financial governance frameworks, opening regional aviation to competition, and facilitating the free movements of people, goods, and services through open borders.

Highlights:

The 2019 report focuses on three key areas – 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 industrialisation 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 centre”.

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.

Significantly, 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 U$134 billion a year.

It includes eliminating all applied bilateral tariffs in Africa; keeping rules of origin simple, flexible, and transparent and removing all nontariff barriers on goods and services.

Again, it added implementing the World Trade Organisation’s Trade Facilitation Agreement to reduce cross-border time and transaction costs tied to non-tariff measures and negotiating with other developing countries to reduce their tariffs and non-tariff barriers, by 50 per cent.

The African Economic Outlook bridges a significant knowledge gap with respect to African economies through regular, rigorous, and comparative analysis.

It also provides relevant and essential reference material on Africa’s economic development, for researchers, investors, civil society organisations, and development partners.

A full set of updated growth projections will be released in May 2019.

GNA

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