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Working Paper 229 - Structural change, economic growth and poverty reduction – Micro-evidence from Uganda
29/01/2016 14:15
Working Paper 229 - Structural change, economic growth and poverty reduction – Micro-evidence from Uganda
AfDB GEF Partnership - Catalyzing transformational change through green growth in africa
11/01/2016 16:23
AfDB GEF Partnership - Catalyzing transformational change through green growth in africa
AfDB Partner of Choice for East Africa - EARC Report 2014
08/10/2014 12:27
AfDB Partner of Choice for East Africa - EARC Report 2014
Economic Brief - Employment and Productivity Growth in Egypt in a Period of Structural Change 2001-2008
17/07/2014 14:45
Economic Brief - Employment and Productivity Growth in Egypt in a Period of Structural Change 2001-2008
Tracking Africa’s Progress in Figures
09/05/2014 09:12
Tracking Africa’s Progress in Figures
African economies have sustained unprecedented rates of growth, driven mainly by strong domestic demand, improved macroeconomic management, a growing middle class, and increased political stability. As the continent continues to evolve, the African Development Bank’s <a href="t3://page?uid=6814"><strong>Tracking Africa’s Progress in Figures</strong></a> publication looks at the key megatrends of the last few decades that will shape Africa’s future. <h3>Human Development</h3> <a href="t3://file?uid=47718"><img align="left" height="100" src="uploads/RTEmagicC_1-Human-Development-tracking.png" alt="" /></a>Over the last 20 years the continent’s population has grown rapidly and in 2011 exceeded the 1 billion mark. Of all global regions, Africa will lead population growth over the next 50 years. Linked to this megatrend of rapid population growth is that of urbanization. The people of Africa will increasingly be city dwellers. Since 1960, the urban share of Africa’s population has doubled from 19 to 39 percent, equivalent to an increase of more than 416 million people in 2011. This means that Africa will have some of the largest mega-cities in the world. With a large population, Africa can harness and build on the expanded workforce to spur economic growth. However, this is conditional on Africa improving access to and equity within health systems, articulating right education policies, and creating employment opportunities. <h3>Economic Performance, Inclusiveness, and Structural Transformation</h3> <a href="t3://file?uid=47715"><img align="left" height="100" src="uploads/RTEmagicC_2--Economic-structural-transformation-tracking.png" alt="" /></a>Africa is on the rise. On aggregate, the region’s GDP growth is expected to average more than 5 percent over 2013–2015. Average inflation in Africa stood at 8.9 percent in 2012 and has since edged down to 6.7 percent in 2013, having been largely contained in most African countries. Macroeconomic stability, trade and exchange rate liberalization, and new policies and incentives supportive of the private sector have helped drive private sector development. Supported by the strong economic growth, the proportion of people living in poverty has fallen from over 50 percent in 1981 to less than 45 percent in 2012. This is coupled with the continent’s emerging middle class, grown to some 350 million people and projected to reach 1.1 billion by 2060. Africa’s growth, however, has not been even across all countries. Six of the ten most unequal countries in the world are in Africa, and there is not yet any evidence of progress in reducing income inequality. With the endowment of a young growing workforce on the one hand and natural resources on the other, Africa has an important opportunity for inclusive growth. The challenge is to seize it through wellexecuted investment in infrastructure, increased access to education and relevant training, the development of capable institutions, and support for private investment and job creation. Structural economic change is indispensable to achieve the desired progress of Africa and to bring prosperity to the continent’s populations. In order to alleviate poverty and reduce income inequalities, Africa will need to embrace structural transformation while maintaining robust economic growth. Fostering diversification through transition to high-productive sectors will be a catalyst for industrial upgrading and technological innovation which in turn will increase job creation. The path toward obtaining the status of middle-income and high-income countries will necessitate diversifying African economies away from dominant sectors such as agriculture and commodities. <h3>Governance, Fragility, and Security</h3> <a href="t3://file?uid=47717"><img align="left" height="100" src="uploads/RTEmagicC_3-Governance-Fragility-tracking.png" alt="" /></a>Africa’s rapid economic growth is transforming the lives and livelihoods of Africans at an unprecedented<br />pace. Such growth is underpinned by improvements in governance: over the period of 2000-2012, around 89 percent of African countries have improved their capacity to deliver economic opportunity and human development; 67 percent of countries made progress in fostering political participation, gender equality, and human rights; and 40 percent of countries strengthened their safety and rule of law. Tackling corruption remains an essential part of Africa’s development agenda. Africa is growing, creating both opportunities and risks. Change is intrinsic to the development process; if managed effectively, they can help unlock Africa’s development potential. Yet change can also be disruptive: urbanization and slum development, the youth bulge, inequality and social exclusion, climate pressures, environmental damage, new resource rents and resource scarcity, and weak governance all have the potential to place African societies under considerable strain. Fragility comes about where these pressures become too great for countries to manage within the political and institutional process, creating a risk that conflict spills over into violence. Despite tough challenges posed by fragility, progress is possible. While various fragile states have lost ground in terms of economic growth during earlier periods of conflict—such as the case of Liberia where GDP dropped by as much as 90 percent in 20 years—many of them, with peace and stability, are now on the path of growth and recovery. More effective and better coordinated efforts, tailored to each individual situation, must be made to assist countries affected by fragility and conflict, and countries in transition in managing political, security, economic, and environmental stresses that make them and their citizens vulnerable. <h3>Regional Integration, Trade, and Investment</h3> <a href="t3://file?uid=47721"><img align="left" height="100" src="uploads/RTEmagicC_4-Regional-integration-tracking.png" alt="" /></a>In recent years, Africa has emerged as a frontier market, having increasingly attracted the attention of investors. In 2012, Africa’s foreign direct investment (FDI) inflow grew to USD 50 billion while exports amounted to USD 641 billion. At the same time, intra-African trade remains low. Integration remains essential for Africa to realize its full growth potential, to participate in the global economy, and to share the benefits of an increasingly&nbsp; connected global marketplace. With plans to establish regional- and continental-wide free trade areas well underway, political commitment will be required to translate the trade agendas into sound policy and regulatory reforms to maximize the benefits. <h3>Infrastructure Development</h3> <a href="t3://file?uid=47719"><img align="left" height="100" src="uploads/RTEmagicC_5-Infrastructure-Tracking.png" alt="" /></a>As Africa continues to urbanize, the importance of public investment in infrastructure becomes increasingly evident. Basic amenities such as housing, drinking water, and sanitation facilities are needed to provide Africa’s growing population with a better standard of living. Investments in energy and transport will also help increase access to affordable and reliable electricity, improve transport connectivity, and reduce transport cost and time. At the same time, Africa’s rising consumer class has resulted in a surge in mobile-cellular subscriptions and internet usage. As it stands, broadband coverage is at 16 percent and will likely reach 99 percent by 2060. <h3>Agriculture, Food Security, and a Greener Environment</h3> <a href="t3://file?uid=47714"><img align="left" height="100" src="uploads/RTEmagicC_6-Agriculture-tracking.png" alt="" /></a>Agricultural production has increased, but mainly by bringing more land under cultivation rather than by<br />improvements in yields. Feeding the expanding urban population will present a challenge that will entail<br />adoption of the latest technologies and high-yielding crop varieties as a way of raising productivity. Strengthening agriculture and food security through an integrated value chain approach can improve the livelihoods of Africans who live in rural areas. Many are reliant on subsistence farming, and a sizable proportion is chronically vulnerable to climatic uncertainty. Africa lives off its land, and more than 227 million Africans work on the land, which too often fails to provide for their needs. By continuing to invest in rural infrastructure (such as rural roads, irrigation, electricity, storage facilities, access to markets, conservation systems, and supply networks), countries can increase their agricultural productivity and competitiveness.Read more
Economic Brief - "Banana Out of Republic?": Note on the Political Economy of Africa’s Transformation
18/12/2013 14:05
Economic Brief - "Banana Out of Republic?": Note on the Political Economy of Africa’s Transformation
Economic Brief - The Search for Inclusive Growth in North Africa- A Comparative Approach
11/12/2013 16:59
Economic Brief - The Search for Inclusive Growth in North Africa- A Comparative Approach
Capacity Development - A Foundation for Transformation
02/12/2013 14:25
Capacity Development - A Foundation for Transformation
Quarterly Thematic Review Central Africa- Structural Transformation in Central Africa - Issue N°2 - August 2013
21/10/2013 14:59
Quarterly Thematic Review Central Africa- Structural Transformation in Central Africa - Issue N°2 - August 2013
Working Paper 155 - Youth Jobs and Structural Change: Confronting Africa’s “Employment Problem”
08/10/2012 14:22
Working Paper 155 - Youth Jobs and Structural Change: Confronting Africa’s “Employment Problem”
Africa has enjoyed over a decade of sustainable growth where regional growth has exceeded the global average and per-capita income for the region is steadily increasing. During the past decade sub-Saharan Africa was home to six of the ten fastest growing economies in the world. However, there are signs that this growth turn-around has not resulted in robust growth of ‘good’ jobs particularly for the young whose share has been rising over time. The share of the youth in Africa is now higher than any other part of the world. This demographic transformation offers the possibility of a growth dividend, as in the case of Asia, if a rapidly growing work force can be combined with capital and technology. However, it can also present a major challenge. The continent is not creating the number of jobs required to absorb 10-12 million young people entering the labour market each year and as recent events in North Africa have shown, lack of employment opportunities in the face of rapidly growing young labour force can undermine social cohesion and political stability. According to a recent projection, Africa will have the largest workforce in the world by 2040, surpassing both China and India. The paper argues that sub-Saharan Africa does not face a severe employment problem but that of the absence of decent job opportunities. It argues thatAfrica’s employment problem is symptomatic of its lack of structural change –the shift in resources from lower to higher productivity uses. In spite of rapid growth, Africa has undergone very little structural transformation. While unemployment rates in most African countries are low, they also tend to have very large informal sectors, with a bulke of the employed langushing in vulnerable employment and working poverty. There is quite a bit of evidence that since 1990 structural change has moved in the wrong direction in Africa where labor has moved from higher to lower productivity employment.&nbsp; &nbsp; Youth unemployment rates in Africa compare favourably compared to regional and world averages. Worldwide there is a fairly regular relationship between the overall rate of unemployment and the rate of youth unemployment. However, at 1.9 the ratio of sub-Saharan Africa’s total unemployment to youth unemployment rate is below that which would be predicted from the region’s overall rate of unemployment. The global ratio of total unemployment to youth unemployment is higher (at 2.7). However, North Africa’s youth unemployment rate substantially exceeds its predicated value. The African Development Bank’s 2012 household and labour force survey with its coverage of 16 countries provides the most comprehensive picture to date of the performance of African labour markets. The survey finds considerable heterogeneity in Africa’s labour markets. These results confirm that neither overall nor youth unemployment rates in sub-Saharan Africa stand out globally, while variations across countries is significant.&nbsp; African countries with well-structured labour markets and a large formal sector tend to have higher unemployment rates. This is especially true in southern Africa where unemployment exceeds 15 percent in Botswana, Namibia, and South Africa. Unemployment is also high by international standards in North Africa – especially in Algeria and Tunisia. Unemployment is relatively low in lower income countries while the informal sector is large (Ethiopia, Ghana, Tanzania and Uganda). A third group comprises of countries with large informal sectors and unemployment rates in the range of five to 15 percent.&nbsp; &nbsp; In most African countries job search periods are longer for those with higher education levels and therefore tend to constitute a larger cohort of the unemployed. Except for Niger and South Africa, youth unemployment rates tend to be lowest among those with either no or basic education. In 6 of 14 countries for which data were available, the unemployment rate for those with tertiary education was the higher of all. In many African countries, self and informal employment accounts for a majority of young workers. With some country specific exceptions, less than 20 percent of Africa’s young workers find wage employment and over 70 percent of workers in Congo, DRC, Ethiopia, Ghana, Malawi, Mali, Rwanda, Senegal, and Uganda are either self-employed or find themselves in family work. The paper argues that the key to reducing unemployment and informality in all levels including the young is the rapid growth in good jobs as a result of substantial structural change. Industrialization can boost formal job creation through labour intensive growth. Nevertheless, critical changes in the labour market and in the education system will also be needed to increase the employment intensity of growth in the formal economy. In the short run a number of interventions can be undertaken to improve the employment prospects of new labour force entrants. <ul><li>Addressing open unemployment and helping the young find better jobs: Governments can target young workers in employment intensive activities, such as tourism and construction with programs that offer cash for work. Public works programs provide opportunities for young workers with low skills to acquire work experience and subsequently find more permanent work.&nbsp; </li><li>Building relevant skills: Increased emphasis on post-primary education through education budgets, improving the quality of teachers and instruction in public schools are critical. In the long-term it is essential to restructure education systems to teach the skills needed to succeed in a global marketplace. &nbsp;</li><li>Reform of labour legislatives and institutions: pertinent changes in labor regulations that set minimum wages determine social insurance contributions and protect job security need to be changed. In some countries high level of wages relative to productivity are deterrents to growth in outward-oriented manufacturing. In many countries procedures for laying-off workers for economic and technological reasons are complex and seldom used. Separating social insurance from formal job status and social contributions from formal sector wages should be an important long-term goal. </li></ul>Read more
Economic Brief - Open, Smart and Inclusive Development: ICT for Transforming North Africa
13/07/2012 13:17
Economic Brief - Open, Smart and Inclusive Development: ICT for Transforming North Africa
MDG Report 2011 - Full Report
09/10/2011 23:00
MDG Report 2011 - Full Report
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