Africa needs accelerated structural transformation in order to take the bulk of its population out of poverty. This requires deeper investment in factors leading to growth-enhancing structural change. African countries need to diversify and expand the sources of economic growth while creating opportunities for more inclusiveness. The vision leading to most African countries attaining middle income status by 2060 cannot be delinked from the prerequisite of creating technological-driven and competitive industries in Africa.

Compared with other regions, African countries have a low stock of infrastructure, particularly in energy and transportation, and the potential for information and communication technologies (ICTs) has not been fully harnessed. This pronounced infrastructure deficit, coupled with burdensome trade regulations, has raised the cost of doing business and constrained domestic productivity. It also presents a critical bottleneck to regional integration. Today, African countries are among the least competitive economies in the world.

In recent years, many African countries have experienced a growth revival, but this has not necessarily generated decent jobs. Unemployment remained high among youth and the adult African population. Little attention has been paid to the role of informal sector in fostering growth and creating jobs. In fact, the informal sector contributes about 55 per cent of Sub-Saharan Africa’s GDP and 80 per cent of the labour force. Nine in 10 rural and urban workers have informal jobs in Africa and most employees are women and youth. The prominence of the informal sector in most African economies stems from the opportunities it offers to the most vulnerable populations such as the poorest, women and youth. Even though the informal sector is an opportunity for generating reasonable incomes for many people, most informal workers are without secure income, employments benefits and social protection. This explains why informality often overlaps with poverty. For instance, in countries where informality is decreasing, the number of working poor is also decreasing and vice versa.

More than 30 million Africans (about three per cent of Africa’s total population) are living outside their home countries. This figure includes those living within other African countries. These African migrants send money to their families in Africa. Remittances by African migrants play an important role as a source of financing and foreign exchange for African households and countries. A recent report published by the United Nations Conference on Trade and Development (UNCTAD) shows that remittances sent to the world’s poorest countries including 33 African countries have increased to US $27 billion in 2011 from US $3.5 billion in 1990. For Africa as a whole, remittance inflows have more than quadrupled since 1990, reaching US $40 billion in 2010. This represents about three per cent of Africa’s total GDP. Globally, the amount of remittances reached US $300 billion in 2010, surpassing foreign direct investments (FDI) and official development assistance (ODA) combined. The estimate for the Africa figure is widely believed to be conservative, given the evidence of underreporting as some remittance transfers are sent through informal channels. Accounting for informal flows could raise the total amount of remittances to Africa by about 50 per cent.

Africa’s power sector is facing many challenges, mainly due to insufficient generation capacity which has limited electricity supply, resulting in low access. The main obstacle to the increase in electricity generation capacity is the high cost of producing electricity, forcing governments to subsidize consumption. In 2010, the average effective electricity tariff in Africa was US $0.14 per kilowatt-hour (kWh) against an average of US $0.18 per kWh in production costs. Consumption is effectively subsidized, but with significant disparities among African countries.