Press release: 3 March 2014
Much of Africa’s celebrated growth is vulnerable according to a groundbreaking new report from the African Center for Economic Transformation (ACET) launched today in Johannesburg.
When growth from mining and oil is discounted, some of the continent’s apparent economic powerhouses are revealed to be languishing, and failing to create jobs or opportunities for a growing youth population. This could lead to future political or social unrest.
Nigeria and Ghana, for example, rank respectively 3rd and 6th from the bottom in the report’s African Transformation Index, which assesses 21 sub-Saharan countries on the rate of their economic transformation. The top-ranking countries are Mauritius, South Africa, and Cote d’Ivoire in that order.
K.Y. Amoako, President of ACET, said: “Africa has made great progress in recent years, but our report shows that current growth patterns are not sustainable and will not drive development or equality. Africa needs growth with DEPTH—namely Diversification, Export competitiveness, increased Productivity, and Technological innovation—all leading to Human wellbeing. Only then will the continent truly transform.”
The report compares Africa’s performance with that of eight earlier transformers: Brazil, Chile, Indonesia, Malaysia, Singapore, South Korea, Thailand, and Vietnam. It draws out lessons from these countries, which used to be poor and underdeveloped, but several of which are now rated as upper middle- or even high-income.
The report identifies six key challenges for businesses considering whether to invest in Sub-Saharan Africa. They are: an unfavourable policy environment; poor governance; weak infrastructure; an unskilled labour force; lack of availability of goods locally; and small domestic markets. One executive interviewed for the report said: “until there is an educated and skilled workforce, all other initiatives and incentives are of no use.”
The report identifies 10 drivers of economic transformation in which African governments should invest:
– Increasing state capacity for macroeconomic management, public expenditure management, and guiding economic transformation
– Creating a business-friendly environment that also fosters effective state-business consultation and collaboration on economic transformation
– Developing people’s skills for a modern economy
– Boosting domestic private savings and investments
– Attracting private foreign investment
– Building and maintaining physical infrastructure
– Promoting exports
– Facilitating technology acquisition and diffusion
– Fostering smooth labor-management relations
– Identifying and supporting particular sectors, products, and economic activities in each country’s potential comparative advantage.
The report is available at www.africantransformation.org.
Mr. Kobina Aidoo
+233 266 197 854
The African Center for Economic Transformation (ACET) is an Accra-based economic policy institute supporting Africa’s long-term economic growth through transformation. Founded by K.Y. Amoako, former Executive Secretary of the UN’s Economic Commission for Africa, ACET’s team of roughly 30 core staff come from every sub-region of the continent, including Burkina Faso, DRC, Ghana, Kenya, Morocco, Nigeria, and Uganda. More at www.acetforafrica.org