“Unleashing Africa's potential as a pole of global growth” was the topic addressed at the Postgraduate School of Agriculture and Rural Development (PGSARD) and the Public Policy and Governance Platform’s Brown Bag seminar on 7 June 2012 at the University of Pretoria.
Dr Adam B Elhiraika, the Chief of the Macroeconomic Analysis Section of the United Nations Economic Commission for Africa (UNECA) was the keynote speaker and also officially launched the Economic Report on Africa (ERA) by the UN Economic Commission for Africa (UNECA) and the African Union Commission for 2012.
The report put forward the following key messages:
The world economy slowed with increased risks and uncertainties in 2011, and Africa is expected to feel the impact of the crisis through trade and capital flow channels in the short term. But improved domestic economic governance, stronger relations with emerging economies and the outcome of global economic rebalancing could open new opportunities for Africa’s long-term development. Indeed, Africa’s positive growth trend is poised to maintain a solid pace in the medium term, thanks to increased export gains (due to higher commodity prices and strong export demand) and buoyant domestic demand (arising from public investment spending, increased agricultural production, better economic management and strong recovery of capital and investment inflows).
This being said, numerous domestic and external financial resources available to African governments have not yet been fully realised, resulting in a gap between the current and potential mobilisation of financial resources. African governments have begun to strategise how to tap into new sources of financing, and many policy options exist to unlock them.
The African growth resurgence in an environment of improved economic management, good governance and control of corruption - as well as Africa’s resilience to the global economic and financial crisis - have shown to African leaders, institutions, development partners and other stakeholders that future world growth will depend on harnessing both the productive and untapped consumer demand of Africa. In order for Africa to become a global growth pole, such that growth within Africa will help drive growth processes in other economies worldwide, African countries should:
Sustain the growth momentum of 2000-2008 while the rest of the world should also sustain its momentum of the same period, in which case, Africa will account for at least 5 per cent of world GDP by 2034.
Vigorously address the development deficits in the areas of structural transformation of output and trade, infrastructure, human resources and science and technology.
Capitalise on the opportunities and manage the risks presented by the emergence of a multi-polar world and resource shifts towards Asia and other developing regions. These trends include rising global commodity prices and demand, stronger trade relations with new partners, greater FDI from emerging economies, further infrastructure development by new partners and expansion of the diasporas’ input beyond remittances.
Further expansion of intra-African trade, export diversification and trade facilitation are required to release its potential. Intra-African trade is more sophisticated than Africa’s trade with the rest of the world, suggestive of a possible mutually reinforcing relationship between regional integration and diversification, providing strong impetus to the case for a continental free trade area and deeper trade facilitation.
Based on current global conditions, Africa can grow even faster and diversify its economic foundations and embark on industrialisation by investing heavily in science and technology, infrastructure and education.
Dr Elhiraika coordinates the Commission’s key annual flagship publication (the ERA) and co-coordinates the African Economic Outlook, a joint annual publication of the African Development Bank, United Nations Development Programme, OECD and UNECA. Before joining the United Nations, he was a Research Economist at the Islamic Development Bank (Saudi Arabia), Associate Professor of Economics, the United Arab Emirates University, Senior Lecturer, the University of Swaziland (Swaziland) and the University of Fort Hare (South Africa), and Assistant Professor of Economics, University of Gezira (Sudan). Elhiraika has a PhD in Economics from Glasgow University, UK (1991), an MA in economics from the University of Kent at Canterbury and several publications in internationally refereed journals as well as monographs and books.
The objective of the PGSARD and PP&G Brown Bag seminars are to enhance debate on issues related to rural and agricultural development. Presentations include policy documents, final and intermediary research findings and discussion papers.