The inaugural Africa Transformation Report ranks Mauritius as the most economically transformed country out of 21 sub-Saharan African countries measured in its African Transformation Index, which takes account of a country’s economic diversification, export competitiveness, productivity, state of technology upgrading and human well being.
The continent’s largest economy, South Africa, ranks second and Côte d'Ivoire third, while Nigeria, Burundi and Burkina Faso prop up the index.
The ranking has been included within a larger 207-page study, which cautions that, while many African economies are growing strongly, most economies are not transforming sufficiently to support a sustainable reduction in poverty, inequality and unemployment.
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 over 6% a year. However, much of this grow 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 study 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, arguing that countries needed to diversify their production and exports, become more competitive and productive, while upgrading the technologies they employed in production processes.
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 the urgent need to form national social compacts between government, business and civil society to support transformation.
Finance Minister Pravin Gordhan emphasised the same point in his recent Budget address, when he highlighted the work being done to secure a social compact to reduce poverty and inequality and raise employment and investment. Gordhan stressed this could not be a “pact amongst elites, a coalition amongst stakeholders with vested interests. Nor can it be built on populist slogans or unrealistic promises”.
“Our history tells us that progress has to be built on a vision and strategy shared by leaders and the people – a vision founded on realism and evidence,” the Minister stressed.
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:
• Fostering partnerships between governments and the private sector to facilitate entrepreneurship, investment and technology upgrading.
• Promoting exports, particularly outside of 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 asserted.
He also called on African citizens to begin to demand transformation. “Ask your government, how come we are not diversifying? How come our productivity remains stuck? How come our technological levels and our exports are not growing?”