World Economic Forum on Africa - Sustaining The Continent's Growth
For the past decade, Africa has exhibited strong economic growth. A new economic growth momentum has been established. The continent weathered the financial crisis and has bounced back. But headline economic growth is not enough. Deliberate policies to reduce inequalities and promote inclusion are now needed more than ever before. It is time to focus on people’s expectations, i.e. decent work, a living wage, access to basic service, more democracy, and accountable governments.
Africa’s remarkable growth trajectory is projected to remain above 5 per cent in 2014 with West Africa the fastest growing sub-region, representing the continent’s largest business opportunity. Such momentum is a welcome and necessary boon to a region whose youthful population offers the prospects of a significant demographic dividend fuelled by growth in consumer industries, manufacturing and business process outsourcing.
Africa is the world’s second-fastest-growing region. Poverty is falling, and around 90 million of its households have joined the world’s consuming classes—an increase of 31 million in just over a decade.
Nigeria, sub-Saharan Africa’s second-largest economy and most populous nation – with over 160 million inhabitants – already plays a crucial role in advancing the continent’s growth; yet it is also emblematic of the challenges of converting natural wealth into solutions that address persistent social challenges.
Inclusive growth requires broad participation in the development process. While Africa recently has enjoyed fairly rapid economic growth, it is debatable whether this has led to the kind of transformation needed to create decent jobs and improve well-being over the long term.
The continent must create wage-paying jobs more quickly to sustain these successes and ensure that growth benefits the majority of its people.
Despite the creation of 37 million new and stable wage-paying jobs over the past decade, only 28 percent of Africa’s labour force holds such positions. Instead, some 63 percent of the total labour force engages in some form of self-employment or “vulnerable” employment, such as subsistence farming or urban street hawking. If the trends of the past decade continue, Africa will create 54 million new, stable wage-paying jobs over the next ten years—but this will not be enough to absorb the 122 million new entrants into the labour force expected over the same period. However, by implementing a five-part strategy to accelerate the pace of job creation, it is estimated that Africa could add as many as 72 million new wage-paying jobs over the next decade, raising the wage-earning share of the labour force to 36 percent.
Whilst focusing on underlying drivers of growth in Africa and their implications for social and economic inclusion, we should at the same time address whether and how inclusive growth can contribute to broader economic, social, and political transformation. Important issues include, for example, gender, youth, the middle class, and the private sector in Africa’s development process over the last decade.
For Africa, the ingredients for inclusive growth are well known: boosting agricultural production, helping small businesses, better quality and relevant education, encouraging the private sector, improving the investment climate, and addressing gender and regional disparities. Promoting inclusive growth will also help ensure political stability as equal distribution of wealth, increased social and productive sectors, spending leading to the creation of decent work, and adequate fiscal policies will reduce the risks of political uprisings. The recent events in North Africa, rooted by a “youthquake” and supported by revolutionary social media, are typical examples of extreme disparities in social sectors, high income inequalities, and lack of opportunities for improving welfare by disadvantaged groups such as youth and women.
The time to unlock Africa’s internal potential is now. As the foremost gathering on the continent, the 24th World Economic Forum on Africa - Forging Inclusive Growth, Creating Jobs - will be taking place in Abuja, Nigeria, from 7 - 9 May 2014.
It will bring together regional and global leaders to discuss innovative structural reforms and investments that can sustain the continent’s growth while creating jobs and prosperity for all its citizens.
Promoting inclusive growth is now a matter of urgency.