Unless governments can build sustainable growth models less dependent on commodities and based more on adding value domestically, the ‘Africa Rising’ story will be just that: a story, latest assessment report on Africa’s growth optimism by Financial Times has shown.
Besides, the United Nations Economic Commission for Africa (UNECA) Executive Secretary, Carlos Lopes said African countries need to do more to diversify their economies and develop the productive capacities of their youthful and abundant labor force to realize the demographic dividend and achieve structural transformation.
The Executive Secretary stated that structural transformation should be driven from increased agricultural productivity, industrialization or natural resources value-addition, all the way to smart urbanization and inclusive social models.
According to the report, titled, “Africa: Between hope and despair”, Nigeria and South Africa, which together make up more than half of sub-Saharan Africa’s gross domestic product, are in deep trouble.
While the growth narrative reflects an optimism shared by many, the report noted that Africa hardly makes anything as the economic model continues to be to dig stuff out of the ground and sell it to foreign companies.
Indeed, the report noted that Nigeria’s petroleum-dependent economy will be lucky to notch up GDP growth of three per cent this year, barely enough to keep up with population expansion, as a result of concerns bordering on pressure on the naira, rationed foreign exchange, strained budget and looming crisis over balance of payments.
“In country after country, growth is slowing, external positions weakening and fiscal deficits widening. In its semi-annual report, the World Bank forecast growth in Sub-Saharan Africa of just 3.3 per cent this year, less than half the average of 6.8 per cent recorded between 2003 and 2008. Because of their growing populations, most African states need nearly 3 per cent growth just to stand still in per capita terms.
“Perhaps the biggest flaw in the middle class story is that, with a few exceptions, Africa hardly makes anything. For too many countries, the economic model continues to be to dig stuff out of the ground and sell it to foreign companies.
“Moeletsi Mbeki, an academic and a strong proponent of the Africa Rising thesis argues, conversely, that few countries have a strategy to match Asian economies, such as Taiwan and South Korea, which built prosperity on manufacturing and exports. “Yes, African economies are getting more sophisticated,” he says. “But Africa is still not yet in the manufacturing age”, the report added.
(Guardian)
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