African Economic Outlook 2012
The African Economic Outlook (AEO) is an annual publication jointly prepared and published by the African Development Bank, the Development Centre of the Organisation for Economic Cooperation and Development (OECD), the United Nations Development Programme (UNDP) and the United Nations Economic Commission for Africa (UNECA). The AEO has received generous financial support from the European Commission and the Committee of Ambassadors of African, Caribbean and Pacific States. The Report surveys and analyzes the economic performance of African economies and provides information on a country-by-country basis on the short to medium-term prospects on the Continent. An important feature of the 2012 edition of the AEO is that it combines the Bank’s Country Policy and Institution Assessment (CPIA) framework with the preparation of the AEO country notes. The 2012 edition of the AEO covers 53 African countries, including for the first time Eritrea and the new state of South Sudan.
Africa’s average growth declined from 5% in 2010 to 3.4% in 2011, mainly due to the political uprising in North Africa, whose growth rate was only 0.5% in 2011. With the gradual recovery of North African economies, average growth is expected to rebound to 4.5% in 2012 and to 4.8% in 2013. Africa´s economic prospects depend on many unpredictable factors. A key external risk involves the slowdown in the Eurozone which may reduce the demand for African products, while lowering external resource flows, including remittances. Domestic risks such as political upheavals with potential spillovers to neighbors and severe weather, as the droughts experienced in the Sahel region, could reduce GDP growth and threaten food security.
Each year, the Report addresses a specific theme that focuses on a critical area of Africa’s socio-economic development. The theme for 2012 is: “Promoting Youth Employment”. Youth unemployment has long been a major problem in many African countries and contributed to the political unrest which led to the overthrow of governments in Egypt and Tunisia. Given Africa´s rapidly growing population, the demographic pressure on labour markets will continue in many African countries. The AEO analyzes the long-term benefits that could accrue to countries taking advantage of the youth bulge and the more immediate challenge of finding gainful employment for the youthful population. Part of the problem is the mismatch between skills demanded by employers and the types of education acquired by the youth. In this regard, the AEO recognizes the differences in challenges between low income and middle income countries in which the level of education is higher. Given the small size of the formal sector in most African countries, governments must change their outlook on the informal sector and on rural areas and promote job creation there too.