Africa growth prospects remain steady, industry should lead growth – African Economic Outlook 2019
Abidjan – Africa’s general economic performance continues to recover and GDP growth is projected to accelerate to 4% in 2019 and 4.1 in 2020. But improved macroeconomic and employment outcomes require industry to lead growth, according to the 2019 African Economic Outlook report, launched this week by the African Development Bank.
Published annually since 2003, the African Development Bank’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 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 African Economic Outlook report analyses gains of regional public goods, including synchronizing financial governance frameworks, opening regional aviation to competition, and facilitating the free movements of people, goods, and services through open borders.
The 2019 report, which focuses on three key areas – Africa’s macroeconomic performance and prospects; Jobs, growth, 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 labor 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.
Significantly, the report identifies five key trade policy actions that could potentially bring Africa’s total gains to 4.5% of its GDP, or U$134 billion a year: eliminating all applied bilateral tariffs in Africa; keeping rules of origin simple, ﬂexible, and transparent; removing all nontariff barriers on goods and services; 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%.
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, ahead of the Bank’s Annual Meetings in Malabo, Equatorial Guinea.