The 7th edition of the African Economic Conference (AEC) is gearing up for huge rush of leaders and scholars from Africa and around the world to come to Kigali, Rwanda. This year’s AEC will be held from October 30 to November 2, 2012 on the theme of the continent’s prospects for sustainable and inclusive growth in the context of the global economic crisis.
“The meeting will be as remarkable in its high-profile attendees as its frank talk: speakers will include President Paul Kagame of Rwanda; former President of Nigeria, Olusegun Obasanjo; Joaguim Rafael Franco, former Prime Minister of São Tomé and Principe; Donald Kaberuka, President of the AfDB, and Helen Clark, Administrator of UNDP,” the African Development Bank’s Chief Economist and Vice President, Mthuli Ncube, told the Bank’s External Relations and Communications Unit on Thursday.
For Prof. Ncube, the conference theme resonates with the Bank’s Long Term Strategy (LTS), which emphasizes inclusive growth that produces wider access to economic opportunities for Africans across age, gender, regional and geographical divides. It also falls within the development strategies of the Bank’s AEC partners, the United Nations Development Programme and the Economic Commission for Africa.
While recognizing that the near-term outlook for the global economy has deteriorated, with economic recovery in the advanced economies suffering new setbacks and heightened uncertainties, Prof. Ncube acknowledged that “Africa will no doubt meet development challenges.”
His message also stressed that inclusive development would benefit Africa’s vulnerable populations as it can provide better health, water, food and decent jobs. “In our continent, growth has generally remained robust against a backdrop of sluggish global economy,” he said, revealing that according to the African Economic Outlook 2012, average growth of the continent is projected to be 4.5 per cent in 2012 and 4.8 per cent in 2013, up from 3.4 per cent in 2011.
The Chief Economist, however, also acknowledged that the continent’s economic prospects depend on many unpredictable factors, noting that a deeper euro-zone crisis would cause a pronounced global weakening and a more pessimistic scenario. For Africa, Mr. Ncube observed, this could cause lower earnings from exports and tourism, contagion effects for African banks, in addition to lower inflows of official development assistance, foreign direct investment and workers’ remittances. “Deteriorating conditions in the world economy could quickly spill over into slower growth in sub-Saharan Africa,” he further stressed.
The Bank has been at the forefront in its development role and has thus examined how Africa’s growth would be affected if the global economy would be weaker than assumed in the base case scenario. Using key data from analyses, the Chief Economist made the following diagnosis: “A one percentage point drop in GDP growth in OECD member countries will translate into close to half a percentage point drop in Africa’s growth. The most important channel of transmission will be through external trade. The estimates show that a one per cent drop in growth in GDP of OECD countries results in a 10 per cent reduction in Africa’s export earnings and 2.5 per cent reduction in its imports. The impact could be more severe on individual countries, especially those where exports are undiversified and policy buffers are low.”
Prof. Ncube reinforced the Bank’s strong support for inclusive growth as the way to address Africa’s social and economic problems. For him, the emerging consensus is that rapid and sustainable economic growth in Africa must be equitable, which matters for poverty reduction. Inclusive growth is broad-based growth across all sectors, includes productive employment and protects disadvantaged and marginalized groups from adverse shocks. The Kigali conference will provide substantive ideas and input as well as polished recommendations that would include a limited number of key “game-changing” and monitorable actions to make a significant difference in supporting inclusive growth in Africa, the Bank’s Chief Economist said. Furthermore, a small number of papers presented at the conference will be considered for a special edition of the peer review journal, the African Development Review. In addition, Mr. Ncube said, a prize for the best paper presented at the conference, selected by a panel of distinguished experts, will be announced at the closing ceremony.
Prof. Ncube has also affirmed that past themes of the AEC and the lessons learnt have helped African policy-makers incorporate those ideas into their respective government’s innovation-led strategy. African governments, he explained, are now taking deliberate policies measures to reduce inequalities and promote inclusion and these measures are now needed more than ever before. “It is time to focus on people’s expectations: decent work, a living wage, access to basic services, more democracy and accountable governments.”
Echoing Bank Group President Donald Kaberuka, who described Africa at the G20 meeting in October 2011 in Paris as the “Land of Opportunity”, Prof. Ncube said the world needs a new growth momentum in order to deal with the multiple problems we face – unemployment, deficit, debt and global poverty: “Africa and its institutions are keen to play their part in that renewed growth momentum which the world economy needs at this time”.
He also said that Africa and its people aim to be a pole for global growth in the decades ahead and, therefore, promoting inclusive growth is now a matter of urgency. Recalling the ingredients for Africa’s development, Prof. Ncube cited: boosting agricultural production, helping small businesses, providing better quality and relevant education, encouraging the private sector, improving the investment climate, and addressing gender and regional disparities. “Promoting inclusive growth will also help ensure political stability and equal distribution of wealth; increased social and productive sectors; spending leading to the creation of decent work; and adequate fiscal policies that will reduce the risks of political uprisings,” Mr. Ncube observed, concluding: “A number of deliverable messages will come out of the meeting. They include highlighting positive opportunities for Africa.”