“Industrial Policy and Economic Performance in Africa” was at the center of discussion of the Fourth Congress of African Economists that kicked off on 16 November 2015 in Accra, Ghana, bringing together economists from the five regions of Africa and the Diaspora, to exchange views on how to strengthen and encourage research on economic and policy issues related to the structural transformation and development of the African continent within the framework of the AU Agenda 20163.
The Congress was opened by H.E Dr. Anthony Mothae Maruping, Commissioner of Economic Affairs of the African Union, and H.E Hon. Mona Quartey, Deputy Minister of Finance of the Republic of Ghana.
Commissioner Maruping underlined the pivotal role of industrialization in the quest for transformative growth. He explained that, not so long ago, almost every speaker on African economies with the exception of a few, jumped on to a “bandwagon” chanting the refrain: “six out of ten fastest growing economies globally are in Africa”.
According to the Commissioner, analysts put average growth rates at 4%+ seen as rising towards 5%+. The few that did not jump onto this bandwagon were viewed as pariah. Yet Africa has fifty four economies making six only eleven per cent. In addition, given that Africa is still home for over 30 least developed countries and several low middle income countries, all accompanied by rapidly growing populations, growth rates of between 4 and 5 per cent fell short of what would be required to achieve economic transformation sought.
“Sustained growth rate of at least 7 per cent in real terms remains what is required to achieve sufficiently rapid socio-economic development. Coupled with diversification and inclusivity and equitable distribution of income and wealth, some resilience to external shocks would be attained and Africa would be set on the road towards poverty eradication. ….. Many African economies remain commodities based. They thrive during commodities price boom with multinationals engaged in extractive industry repatriating profits. GDP figures then look impressive but very little remains to permeate into the domestic economy.” Unlined Commissioner Maruping. Such economies, he said, experience setbacks when commodities prices fall. Hence the need to transform African economies ensuring diversification and value addition.
“African economies are currently going through a rough patch. Demand for raw materials exports has sharply declined, commodities prices have dropped drastically, drought is adversely affecting agricultural production and hydro-electric power generation, thus exacerbating energy deficit. Unemployment rate is rising and incomes are declining. Poverty is rapidly rising. Tax bases are shrinking. Fiscal deficits are widening. Foreign exchange reserves are dwindling. Domestic borrowing has soared. External borrowing has been complicated by credit rating downgrades. Authorities in most cases are resorting to deep expenditure cuts affecting supply of necessities.” Commissioner further noted, adding that, there is definitely a dire need for a new strategy for African economies. “Business as usual is not an option. Agenda 2063 is that strategic framework”, he said.
Minister Quartey who was addressing the Congress participants on behalf of H.E John Dramani Mahama, President of Ghana, stressed that the meeting will not only be a unique and memorable experience, but will further contribute to the deepening of the knowledge on how to improve productivity and boost inclusive and sustainable growth in Africa through industrialization. The Minister recalled that, over the last decade, Africa has embarked in the transformative process of changing its destiny. “This process has been solid with sustained growth and a high degree of resilience against global economic turbulence”. Noted the Ghanaian Deputy Minister of Finance. She further pointed out that, the continent is home for some of the world fast growing economies returning more than seven per cent of annual economic growth. Ministers Quartey expressed satisfaction saying that “today, there are encouraging prospects for a strong and prosperous Africa that is free from extreme poverty”.
Dr. Rene N’Guettia Kouassi, Director for Economic Affairs of the African Union moderated most of the sessions during the Congress. He set the context by recalling that on September 25th, 2015, the General Assembly (GA) adopted by acclamation Transforming Our World: The 2030 Agenda for Sustainable Development together with its 21 Sustainable Development Goals (SDGs) and 169 targets. The Agenda also needs more than three hundred indicators for its assessment and follow-up. He said statisticians are busy working on methodologies for quantifying attendant indicators and that Africa had contributed substantially to this outcome through her Common African Position on Post 2015 Development Agenda (CAP on P2015 DA).
“Industrialization is a fundamental part of the African strategy towards inclusive growth and economic transformation for the next decade and beyond (AU, 2014). Indeed, at a time when countries of the continent are in search of new sources of economic growth to consolidate the gains of the last decade and move towards inclusive growth and sustainable development, attention to industrialization is more important than ever”. Noted Director Kouassi.
The 2015 Congress of African Economists is an opportunity for researchers, policymakers and practitioners of economic policy and development in Africa and in the diaspora to contribute to the maturation of the debate on industrial policy strategy to implement with a view to boost African development and shift labor from lower to higher productivity sectors over the decades to come. The Congress also provided an opportunity for young African Economists in Africa and in the Diaspora to circulate their research findings as well as share information with African policymakers on industrial development of the continent. It has also enhance skill retention and use so as to propose African solutions to African problems.
Worth recalling that, the First African Economists Congress was held from 2 to 5 March 2009 in Nairobi under the theme: “Towards the creation of the African single currency”. The Second Congress was held in Abidjan, Côte d’Ivoire from 24 to 26 November 2011 under the theme: ” How to achieve strong and sustainable economic growth in Africa, in order to reduce unemployment and support the dynamics of regional and continental integration” and the Third Congress was held in Dakar, Senegal from 6 to 8 March 2013 under the theme “Industrialization and economic emergence in Africa.”
The current Congress featured sessions on developing capacities and skills for Africa’s industrial policy and structural transformation: past, present and future; the role of industrial policy in enhancing Africa’s economic performance; Comparative industrial policies: Lessons from other regions; Africa’s industrial policy in a challenging global context; Industrial policy as a catalyst of Africa’s regional integration; Constrains and opportunities for Africa ’s industrialization; Institutional and regulatory framework for industrial policy in Africa: the role of African states and the private sector; and Navigating contemporary challenges: Some policy options among others.
The African Union invites partners to support this important Congress that hold every two years while thanking the ACBF for contributing to the successful organization of the 4th African Economists Congress.
Source: African Union Commission (AUC)