By Dr. Sangu J. Delle, Chief Executive Officer, CarePoint and Executive Chairman, Golden Palm Investments Corporation
Africa is the world’s youngest continent, with a median age of 19.7 years. The size of the African population will grow from 1.3 billion people today to 2.5 billion in 2050, when 1 in 4 people will be African. Many scholars have debated whether these projections foretell a demographic dividend or a demographic disaster. The answer will lie in how the continent handles myriad challenges, including climate change, energy poverty, the food crisis, education, healthcare, conflicts and the continent’s massive infrastructure gap.
By Yeo Dossina, Head of Economic Policy and Research, African Union Commission, Arthur Minsat, Head of the OECD Development Centre’s Unit for Africa, Europe and Middle EastandRodrigo Deiana, Consultant, OECD Development Centre
Africa’s value chains hold the key to unlocking its productivity, deepening its economic integration, and strengthening its resilience to shocks. Yet regional value chains accounted for just 2.7% of Africa’s total value chain participation in 2019, compared to 26.4% in Latin America and the Caribbean and 42.9% in developing Asia according to the latest edition of Africa’s Development Dynamics, a joint report by the African Union Commission and the OECD Development Centre.
While the private sector across the world is on a journey towards greening their activities, COP26 marked a milestone so significant that it was termed the Business and Finance COP. In other words, COP26 made ‘climate action mainstream business’. But what challenges and opportunities does this newfound interest present for Africa?
Africa is a resource-rich continent, specialising in fuel, mineral and agricultural exports. Statistics on revealed comparative advantage (RCA) show that Africa exports proportionally more primary products than most other regions. Crude materials, which include ore, metal, wood, cotton and other raw textiles, are the continent’s dominant product category, followed by tobacco, various agricultural products and fuel. One consequence of specialising in primary product exports is that other countries get to enjoy the benefits of the value they add to these raw materials. These benefits can range from higher profits for their corporations to a more diversified industrial base and consequently better insulation from economic shocks, as well as a more highly skilled, higher-earning workforce.
By Anthony Black, Professor of Economics at the University of Cape Town
With a large and growing middle class, Africa has huge potential as an automotive market. Vehicle ownership rates across the continent are low, at just 45 per 1 000 persons compared with a global rate of 203 per 1 000. Even more striking is the low level of production: the continent accounts for less than 1% of global vehicle output. Outside South Africa and Morocco, production is minimal: most small national markets are supplied by imports, consisting mainly of used cars shipped primarily from Europe, Japan and the US.
By Eyerusalem Siba, Economist and international expert in private sector development, spatial industrial policies and sustainable urbanisation
The Covid-19 pandemic and associated containment measures hit businesses hard, exposing them to record levels of uncertainty, disrupting value chains, and reversing countries’ hard-earned progress in economic and social development. The knock-on effects of these disruptions on GDP, foreign direct investment (FDI), trade and industrial production have been highest among globally integrated economies that have smaller domestic markets, rely heavily on vulnerable sectors and have limited capacity to adjust.
Par Alain Tchibozo, Chef Économiste de la Banque Ouest Africaine de Développement – BOAD, avec la collaboration de l’équipe des Économistes chargés de la Stratégie et des Études
Avec la croissance démographique la plus rapide de toutes les régions du monde (2,63% par an contre 1,15% pour l’Asie du sud), l’Afrique sub-saharienne enregistre également une croissance soutenue de son taux d’urbanisation. Actuellement de 41,4% contre 31,4% en 2000, ce taux atteindra 50% en 2035 et pourrait se rapprocher de 60% vers 2050. L’accroissement naturel de la population suivi d’un afflux de populations rurales vers les villes accélèrent le développement de villes intermédiaires, de grandes villes, voire de mégapoles mal préparées à accueillir ces populations nouvelles.
Par Ablamba Ahoéfavi Johnson, Ministre, Secrétaire général de la Présidence de la République du Togo.
La catégorie des pays les moins avancés (PMA) a été établie par l’Assemblée générale des Nations Unies en 1971, suite à la prise de conscience par la communauté internationale de la nécessité de mettre en place des mesures d’appui aux pays souffrant de handicaps structurels et qui sont menacés par l’extrême pauvreté.
By Daniel Prinz, Research Economist and Country Programme Manager at the Institute for Fiscal Studies(IFS) Centre for Tax Analysis in Developing Countries (TaxDev)
Given the massive impact of the COVID-19 pandemic on public finances globally, it is little surprise that the IMF’s October 2021 forecasts of debt and debt servicing costs in sub-Saharan Africa are substantially higher than was projected in October 2019 (Figure 1). Many countries in sub-Saharan Africa may need to impose fiscal consolidation measures to enhance the sustainability of their public finances even before their economies have fully recovered from the pandemic. The need for higher public revenues is an opportunity for countries to make their tax systems more efficient and equitable, particularly through well-designed green taxes, property taxes and rationalised tax expenditures. Getting these reforms right will be essential to ensure they do not slow the recovery and that they are socially and politically acceptable.