• Director of Brooking’s Africa Growth Initiative discusses a new report, “Foresight Africa: Top priorities for the continent 2020-2030”, touching on mega trends and the opportunities and challenges these present.
• Progress in achieving the 2030 sustainable development goals (SDGs) is mixed. Improvements have been made on 1) primary school enrolment, 2) access to clean water and electricity and 3) under 5 mortality rates. But the continent is falling short on poverty eradication.
• Sub Saharan Africa needs $574bn per year (in 2015 dollars) through 2030 to finance the SDGs. Domestic savings rates are low, but the continent has resources it can mobilise. Improved tax collection (including shrinking the informal economy) and addressing profit shifting by multinationals could both help. Better governance over natural resources would also generate revenues.
• External financing is expected to fill the $10bn financing gap. Overseas development assistance, Eurobond issuance and World Bank financing all seen as options.
• Africa faces demographic challenges with a young and fast-growing population. Job market needs to absorb labour at a time when labour in industry has flattened out. Services sector must create jobs to accommodate a significant amount of moderately skilled labour.
• Overall, the report sees Africa as well primed for trade and investment growth due to 1) a positive overall macro environment, 2) governance and business environment improvements and 3) regional integration (labour and transport).
Why does this matter? The continent is one of the few places in earth where demographics are favourable. Rapid gains in labour supply could boost economic growth across the continent, particularly if combined with productivity improvements. Governance problems have in the past prevented Africa from realising its potential. But if recent improvements can be sustained the continent has a chance of becoming a more meaningful contributor to global growth in the coming decade. And with it improving the living standards of millions of people.
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