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Growth not enough

Terence Creamer

Terence Creamer

14th March 2014

By: Terence Creamer

Creamer Media Editor

  

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The inaugural Africa Transformation Report has one key and unequi- vocal message: the resumption of growth in many African countries is a necessary yet insufficient ingredient to sustainable development.

Six of the world’s fastest-growing economies are currently in Africa, including Angola, Nigeria, Ethiopia, Chad, Mozambique and Rwanda, while several others are expanding at growth rates of better than 6% a year. However, much of this growth is still premised on the extraction and export of natural resources and is not being broadly spread, leaving more than 80% of the continent’s labour force employed in low-productivity farming, or informal urban business activities.

Compiled over a three-year period by Ghana’s African Centre for Economic Transformation (ACET) in partnership with South Africa’s Mapungubwe Institute for Strategic Reflection (Mistra), the 200-page-plus Africa Transformation Report urges African governments to position economic transformation ahead of growth at the centre of their economic and development policies.

Speaking at a launch in Johannesburg, lead author and ACET chief economist Dr Yaw Ansu said growth was “good” and had arisen as a result of macroeconomic reforms, better business environments and higher commodity prices. “But economic transformation requires much more,” Ansu stressed. Countries also needed to diversify their production and exports, become more competitive and productive, while upgrading the technologies they employed in production processes.

The 2014 report ranks Mauritius as the most economically transformed country out of 21 sub-Saharan African countries measured through the prism of its African Transformation Index, which takes account of a country’s economic diversification, export competitiveness, productivity, state of technology upgrading and human wellbeing. The continent’s largest economy, South Africa, ranks second and Côte d’Ivoire third, while Nigeria, Burundi and Burkina Faso prop up the index.

ACET president Dr KY Amoako said the transformation narrative had already been accepted by the African Union in its Vision 2063, as well as by the African Development Bank and the United Nations Economic Commission for Africa. He added that the African Transformation Index provided policymakers with a quantitative measure for assessing their transformation performance and for guiding future strategies.

Mistra executive director Joel Netshitenzhe argued that, to turn growth into an “actual lived experience” for Africa’s citizens, there was an urgent need to form national social compacts between government, business and civil society to support transformation.

Netshitenzhe also highlighted the report’s emphasis on coupling growth with social development. “In fact, rather than merely being a consequence of economic growth, a reduction in poverty and general human development can be part of the drivers of economic growth.”

The report highlights key transformation drivers as being partner- ships between governments and the private sector to facilitate entrepreneurship, investment and technology upgrading; promoting exports, particularly outside the natural resources sector; building technical knowledge and skills; and pushing ahead with regional integration.

Four transformation pathways are also highlighted, including labour-intensive manufacturing; kick-starting agroprocessing value chains, improving the management of oil, gas and minerals; and boosting tourism.

“It’s good that we are growing – we are no longer the hopeless continent. We can transform this hope into reality, but to do that governments must put transformation at the top of their agendas,” Ansu concluded.

Edited by Terence Creamer
Creamer Media Editor

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