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participating more effectively in the global production of goods and services,
Africa can transform its economy and achieve a development breakthrough, according
to the latest African Economic Outlook, released at the African Development
Bank Group’s Annual Meetings.
Produced annually by the African Development Bank (AfDB), the OECD Development
Centre and the United Nations Development Programme (UNDP), this year’s report
shows that Africa has weathered internal and external shocks and is poised
to achieve healthy economic growth rates.
The continent’s growth is projected to accelerate to 4.8 percent in 2014 and
5 to 6 percent in 2015, levels which have not been seen since the global economic
crisis of 2009. Africa’s economic growth is more broad-based, argues the report,
driven by domestic demand, infrastructure and increased continental trade in
manufactured goods.
“In order to sustain the economic growth and ensure that it creates opportunities
for all, African countries should continue to rebuild shock absorbers and exercise
prudent macro management. Any slackening on macro management will undermine
future economic growth,” said Mthuli Ncube, Chief Economist and Vice-President
of the African Development Bank.
The report argues that more effective participation in regional and global
value chains - the range of activities in different countries that bring a
product from conception to delivery to the consumer – could serve as a springboard
for Africa in economic diversification, domestic resource mobilisation and
investments in critical infrastructure. In order to do so, however, the continent
needs to avoid getting stuck in low value-added activities.
For instance, Africa’s exports to the rest of the world grew faster than those
of any other region in 2012, but they remain dominated by primary commodities
and accounted for only 3.5 percent of world merchandise exports in 2012.
Avoiding that trap involves investing in new and more productive sectors, building
skills, creating jobs and acquiring new technology, knowledge and market information.
These interventions require sound public policies, as well as entrepreneurs
that are willing and capable of helping achieve these gains.
The report uses the example of South Africa, which achieved a remarkable turnaround
in its automotive industry by removing obstacles and providing incentives for
component producers and assembly lines. It also shows that the development
of agribusiness value chains in countries such as Ghana, Kenya and Ethiopia
has contributed to economic growth and job creation.
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