Africa’s Economy Expands 3.4% Despite External Shocks: AfDB

ADDIS ABABA – Africa’s economic growth remained stable in 2019 at 3.4 percent and is on course to pick up to 3.9 percent in 2020 and 4.1 percent in 2021, the African Development Bank’s 2020 African Economic Outlook (AEO) revealed Thursday.

The slower than expected growth is partly due to the moderate expansion of the continent’s “big five” — Algeria, Egypt, Morocco, Nigeria, and South Africa – whose joint growth was an average rate of 3.1 percent, compared with the average of 4.0 percent for the rest of the continent.

In 2019, for the first time in a decade, investment expenditure, rather than consumption, accounted for over 50% of GDP growth, says the report.

This shift can help sustain and potentially accelerate future growth in Africa, increase the continent’s current and future productive base, while improving the productivity of the workforce.

Overall, the forecast described the continent’s growth fundamentals as improved, driven by a gradual shift toward investments and net exports, and away from private consumption.

East Africa maintained its lead as the continent’s fastest-growing region, with average growth estimated at 5.0 percent in 2019, the report claims.

North Africa ranked as the second-fastest, at 4.1 percent, while West Africa’s growth rose to 3.7 percent in 2019, up from 3.4 percent the year before.

Central Africa grew at 3.2 percent in 2019, up from 2.7 percent in 2018, while Southern Africa’s growth slowed considerably over the same period, from 1.2 percent to 0.7 percent, dragged down by the devastating cyclones Idai and Kenneth.

“There are stars among us…and we want to applaud them. We want to see more, particularly for countries like mine, which have been left behind, so that more can be done to give them the support that they need,” said Ellen Johnson Sirleaf, former Liberian president, at launching event of the report in Bank’s Abidjan headquarters.

– Education & Skills Mismatch –

The 2020 AEO, themed Developing Africa’s workforce for the future, calls for swift action to address human capital development in African countries, where the quantity and quality of human capital is much lower than in other regions of the world.

The report also noted the urgent need for capacity building and offers several policy recommendations, which include that states invest more in education and infrastructure to reap the highest returns in long-term GDP growth.

Developing a demand-driven productive workforce to meet industry needs, is another essential requirement.

“Africa needs to build skills in information and communication technology and in science, technology, engineering, and mathematics,” the report notes.

“The Fourth Industrial Revolution will place increasing demands on educational systems that are producing graduates versed in these skills,” the report reads.

To keep the current level of unemployment constant, Africa needs to create 12 million jobs every year, according to the report.

With rapid technological change expected to disrupt labor markets further, the report claims it is urgent that countries address fundamental bottlenecks to creating human capital.

“Youth unemployment must be given top priority. With 12 million graduates entering the labor market each year and only 3 million of them getting jobs, the mountain of youth unemployment is rising annually,” said Akinwumi Adesina, AfDB President, who unveiled the report.

“Let’s look at the real lives beyond the statistics. Let’s hear their voices, let’s feel their aspirations,” he added.

Although many countries experienced strong growth indicators, relatively few posted significant declines in extreme poverty and inequality, which remain higher than in other regions of the world, according to AfDB’s report.

Image: The launching event of Report on Thursday was attended by former Liberian president Ellen Johnson Sirleaf, among others. [Photo AfDB]

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