The current global economic slowdown should not viewed in the context of whether Africa is rising or falling but rather as an opportunity to reposition the continent for a more inclusive, sustainable growth, delegates at a major conference in Kigali said yesterday.
The point was highlighted by panelists who discussed growth in Africa at the on-going World Economic Forum on Africa.
The speakers included Kenyan President Uhuru Kenyatta, the Executive Director of Oxfam International, Winnie Byanyima, Nigerian entrepreneur and investor Tony Elumelu, and the First Deputy Managing Director for the International Monetary Fund, David Lipton.
While many countries in Africa have achieved notable rates of economic growth over the last 10 years, the panel emphasised that the falling prices for international commodities that the continent exports like oil and minerals as well as economic weaknesses in both developed economies such as the US and Europe and emerging economies like China call for seeking new strategies for Africa’s growth.
“The story here is that Africa needs to diversify its economy. This is an opportunity to explore where Africa’s wealth is,” Kenyatta said, emphasising that Africa can sustain its growth by leveraging its youth potential by empowering it with employable skills, develop intra-regional trade, and diversify its economy by selling more products and services to the world.
“We cannot afford to ignore education, healthcare and basic sanitation. It’s just how we balance some of the issues. This is an opportunity for us to rethink and rebalance our economies. We can no longer just depend on international markets, we need to begin ending barriers for trading among ourselves,” the Kenyan leader said.
Lipton agreed with Kenyatta on the need to harness regional trade in Africa, explaining that it makes sense at a time when China’s economy is slowing down.
“You can’t continue to count on China the way you used to,” he said, seemingly addressing Africa in very direct terms and encouraging nations to adjust to change by finding a way of relying more on local markets through regional integration and trade as well as diversifying their economies.
‘Africa’s economy won’t fall’
Though IMF has predicted that sub-Saharan African economies will grow at the slowest pace in 16 years and lower than the global average this year— expected to grow on average by 3 per cent in 2016 below the 3.2 per cent global average — Lipton said Africa’s economy is not going to fall if the right approaches are applied.
He encouraged African countries to keep investing in education for the youth, healthcare for their people, and trade among each others.
“Africa is rising, regrouping, and it will be rising,” he said. “Overall, the fundamentals for growth still remain strong in Africa.”
Nigerian investor Elumelu, who is among the wealthiest people on the continent, agreed with the point that young people need to be trained so they can get the right skills to sell services, but also called for governments in Africa to provide reliable infrastructure like energy, and good policies so the private sector can be facilitated to provide solutions.
“Despite the dwindling commodity prices, my appetite for Africa is not going down,” he said, explaining that he continues to invest on the continent and empower young people to do the same.
The African Development Bank estimates that Africa needs to raise $100 billion to fund its high-impact national and regional infrastructure projects in various areas including energy, transport, ICT, and water resources.
That’s why the bank started an initiative called Africa50, through which it will raise the money to fund Africa’s infrastructure within the next 50 years.
But the sustainable economic growth in Africa will not be achieved unless efforts are made to address economic inequality among the continent’s populations, Oxfam’s Byanyima argued.
She said African governments need to tax the rich and ensure that proceeds are invested in education and healthcare for the young and vulnerable so that they are empowered to participate in their countries’ economies.
“We need to tackle economic inequality for the growth to be there,” she said. “There is a huge opportunity to collect more resources if we look at the money that flows untaxed.”
Oxfam, an organisation that mobilises people to fight poverty worldwide, says Africa is losing billions to corruption, poorly negotiated deals and tax dodging.
In a briefing paper, released on Tuesday, the organisation said tax dodging by rich individuals and corporations deprives African nations of huge amounts of money like in the case where corporations have been estimated to cost Africa $38bn annually in tax revenues, while rich individuals in Africa are making use of the global network of tax havens to avoid paying an estimated $14bn a year in taxes.
Oxfam estimates that the lost revenues would be enough to pay for the healthcare that could save the lives of four million children and employ enough teachers to get every African child into school.