Africa’s economic growth fails to create jobs – report

By
Desmond Davies, GNA’s London Bureau

London, July 16, GNA – Since the beginning of
the century, Africa has ranked second behind Asia on the table of the world’s
fastest-growing regions, with average annual growth in gross domestic product
(GDP) of 4.7 per cent between 2000 and 2017, but this has not been translated
into jobs, according to a joint report by the African Union Commission (AUC)
and the Organisation for Economic Cooperation and Development (OECD).

It said this growth had not created enough
decent jobs, and of the 282 million people who were currently working, many
would face unstable employment.

It noted that at the current rate, 66 per cent
of jobs would still be insecure in 2022, a figure far higher than the targeted
41 per cent for 2023.

This would be compounded by Africa’s rising
population, which would see a quarter of the global population being African by
2050.

Africa’s Development Dynamics 2018, the first
annual economic report by the AUC, released at the Commission’s headquarters in
Addis Ababa, focused on “growth, jobs and inequalities” and
highlighted the importance of accelerating the structural transformation of
African economies.

It said growth was still inconsistent: between
2016 and 2020, just three of the continent’s 55 countries should reach the
targeted average annual growth of over seven per cent set by the AU’s Agenda
2063.

The report also drew attention to the need to
increase productivity because African businesses were lagging far behind the
rest of the world in sectors with high job-creation potential, such as
agribusiness, construction, leather, light manufacturing and logistical
services.

Furthermore, growth in Africa had less of an
impact than elsewhere in the world on reducing inequalities and improving
well-being.

If the continent’s Gini coefficient had fallen
by seven further points to 35 – the same level as in Asia – growth would have
lifted another 130 million people out of poverty between 1990 and 2016,
according to the report.

Despite a reduction, extreme poverty still
affects 35 per cent of the African population, or 395 million people.

The report also revealed the mixed
performances of different African regions in terms of growth, jobs and
inequalities.

It said that East Africa had enjoyed stronger
and more resilient economic growth than the other regions, at over four per
cent a year since 1990, on the back of a more diversified economy.

In addition to the underemployment and
vulnerable employment that characterised most of the African labour markets,
some countries in North and Southern Africa faced high structural employment,
the report noted.

In Central Africa, the number of jobs in the
formal economy had been falling since 2015 while East and West Africa managed
to reduce extreme poverty by 23 and 12 percentage points, respectively, between
1990 and 2013.

The report pointed out that inequality in
Africa was most prevalent in Southern Africa, which, in terms of income,
contained six out of the 10 most unequal countries in the world.

It said public action was the key to improved
performances when it came to growth, jobs and inequalities.

“Domestic strategies are more effective when
they encourage good inter-sectoral coordination of government action, the
active participation of economic stakeholders and citizens, and a regional
approach to development.”

“Africa has significant assets for addressing
its issues: a young and enterprising population, regions undergoing fundamental
change with growth in the countryside and rapid urbanisation, considerable
natural resources, dynamic economies, rich ecosystems, and a solid diaspora,”
said Victor Harrison, Commissioner of Economic Affairs of the AUC, while
launching the report.

“However, far too often, public policies have
failed to leverage these assets effectively.

“The implementation of the reform programme as
set out in Agenda 2063 requires an increase in government capacities, greater
responsibility, transparency, co-ordination and the promotion of positive
institutional action,” he added. 

Mario Pezzini, Director of the OECD
Development Centre and Special Adviser to the OECD Secretary-General on
Development, said: “Africa also has a vital role to play in the extensive
reshaping of the framework of international co-operation as required by the
Sustainable Development Goals.

“The continent is an extraordinary cradle of
innovation for development strategies, and it is important that its partners
pay it greater attention and better support the implementation of its creative
strategies.”

The report said that Africa needed development
strategies that were more coherent and which prioritised improved public action
to stand up to the challenges of growth, jobs and inequalities prompted by the
continent’s “remarkable emergence”.

It found that a favourable trend in
commodities prices, strong domestic demand, progress in the pursuit of
macroeconomic policies, and strategies to diversify national economies had been
major drivers of the continent’s recent growth, forecast to reach four per cent
annually between 2018 and 2020.

The decision by certain countries to increase
investment in infrastructure and the growing number of commercial partnerships
– with China, India and other emerging countries – had also proved judicious,
the report added.

GNA

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