As African Ministers of Finance, Planning and Economic Development gather in the Ethiopian capital, Addis Ababa, next week, the chairperson of the African Union Commission, Jean Ping, and the UN Under Secretary General and executive secretary of the Economic Commission for Africa (ECA), Abdoulie Janneh, have said that Africa should be seen as a pole of global growth.
In a joint paper, released ahead of the AU Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development, the two officials said Africa was fast becoming a magnet for investments and a safe haven for international capital and it’s for this reason that the two institutions are working with African policy makers to unleash the potentials that this new development offers.
“We think there is a strong basis to start seeing Africa as a pole of global growth,” the two top officials stated.
The ministerial session will take place from 26-27 March and will be preceded by a technical preparatory meeting of experts to be held from 22-24 March.
Of the top 15 fastest growing economies in the world today, 10 are African. Foreign direct investments to Africa have increased from US$ 9 billion in 2000 to US$ 62 billion in 2009 and are expected to continue to rise in the near future, the joint statement says.
Portfolio investments reportedly were also a healthy US$ 22 billion in 2010. Also in 2010, two African countries had a higher per capita GDP than China, and six more than India.
“This resurgence is giving rise to Africa’s growing recognition as an emerging market and a potential global growth pole. Indeed, there is a growing consensus that Africa is on the verge of an economic take-off and could become a pole of global growth.
“This is largely based on some factors: Africa’s untapped natural resource endowment which provides significant investment potential; the continent’s steady population growth, which, if properly managed, could yield positive returns; the rise of the middle class and the untapped regional market; high economic growth rates; improvements in the general macroeconomic environment; strategic and timely institutional reforms, as well as improved governance in many African countries; improved business environment in many African countries and increased FDI in recent years,” the statement said.
The growth resurgence is said to have transformed Africa from the world’s lowest growing region of the past to one of the world’s fastest growing regions.
“However, to sustain economic growth, Africa will need to enhance productivity and competitiveness through innovation and investing in infrastructure, technology, higher education and health; broadening the range of and adding greater value to exports; and making the necessary investments in productive sectors and trade facilitation. All these measures require collaboration among stakeholders in a developmental state – as detailed in our joint publication Economic Report on Africa 2011.”
If Africa maintains its 2000–2008 average annual growth of 5.6 per cent and the rest of the world does the same at 2.9 per cent, the continent’s contribution to world GDP will increase from 2.4 per cent in 2012 to reach 5.1 per cent in 2034.
“Studies suggest that in most African countries, inadequate infrastructure is a key constraint on doing business and can depress firm productivity by around 40 per cent. Estimates show that closing Africa’s infrastructure gap would require approximately US$ 93 billion a year over the next decade. While it is encouraging that about half of the continent’s infrastructure financing need is currently being met, there is still a need for increased and substantial external support in this area,” says the statement.
Meanwhile, the two institutions are collaborating with the African Innovation Foundation and have established the Innovation Prize for Africa.
This annual prize honours and encourages innovative achievements that contribute toward developing new products, increasing efficiency or saving cost in Africa. The first price for the winner and runners up are US$ 100,000 and US$ 50,000 respectively. They will be awarded on 26 March.
By Afrique en ligne