Independent High-Level Panel’s Optimistic Vision for Africa’s Future
"Africa can make faster progress and take its rightful place in a globalized world".
Tunis, 22 January 2007 – Africa now has the brightest prospects for rapid growth and prosperity in decades if only the continent and its leaders are prepared to seize and benefit from this window of opportunity, the Independent High Level Panel on the Bank Group says in its report.
The 13-member Panel co-chaired by former Mozambican President Joachim Chissano and former Canadian Prime Minister, Paul Martin and including the Nobel Laureate in economics, Joseph Stiglitz, cites policy changes and management that have led to the highest rates of sustained growth since most African countries gained independence as the primary bases of its optimistic predictions.
"We believe that Africa can transform itself into a stable, integrated, and prospering continent of competitive, diversified, and growing economies. Taking its rightful place in the world, it will be a continent with strong, integrated domestic markets, participating fully in global trade and investment. Peace and democracy will have taken hold in many more countries, underpinned by transparent and accountable governance," the report says.
It says that with more than 1.5 billion people in 2030, Africa will be as populous as China or India. Its young people will be well schooled and well trained for good jobs. More than half will live in towns. Most will be employed, many in manufacturing and service industries, some in "South-South" ventures.
African workers will be driving the continent’s progress, with a vibrant private sector offering them good opportunities. Agricultural productivity will be much higher, increasing value addition, allowing greater crop diversification and exports, and bolstering food security. A slowdown in population growth will mean fewer dependents per worker and higher per capita incomes for viable futures. Men and women will have equal access to assets and opportunities, the report says.
The report notes that for the first time in at least 25 years, growth in the number of poor people has been arrested. Gross domestic product (GDP) growth which has been strong over the past several years is forecast to remain so, in a favorable world economic context that has resulted in the emergence of new trading partners and greater South-South cooperation.
Going forward, the advisory Panel notes that Africa’s macroeconomic reform and stabilization efforts have created a more favorable business climate, with nearly all of Africa’s macroeconomic indicators showing positive trends: inflation, international currency reserves, fiscal management, and debt ratios all show encouraging trends.
The strong performance, it said, is partly driven by higher commodity prices, particularly oil. However, 15 non-oil producing countries that are home to over one-third of the continent’s population have also recorded an average of 4.5% growth over the past year.
On the flip side, the report paints a possible desolate scenario that could emerge by 2030 if African countries failed to address the challenges, a situation in which the current progress would only be remembered as "just the upswing of another boom-bust commodity cycle", with attendant negative consequences such as extreme poverty, scarce land and water due to climate change.
The AfDB High Level Panel was established in 2006 by President Donald Kaberuka as an independent advisory body to provide recommendations on the AfDB’s strategic vision and on the operational strategies needed in the medium to long term to achieve its vision. It began work in that year under the co-chairmanship of Messrs Chissano and Martin.
Challenges Africa Must Address:
- Tackling Pervasive and Persistent Poverty: Some 300 million Africans living on less than $1 a day. No Sub-Saharan country likely to meet the MDGs of halving poverty by 2015.
- Build Strong States: Enhancing political rights and civil liberties. Reducing corruption, conflict, assisting fragile states and promoting regional peace and stability.
- Increase Productivity: Competitiveness – infrastructure, skills, institutions, and technology are strategic and important. Poor infrastructure leads to power outages, communication problems, and logistics delays that significantly increase the costs for African firms. Energy costs for firms in some African countries are 6% of total costs, six times those in such emerging countries as China.
- Overcoming economic fragmentation: Africa has more states (53) than any other continent. Its small, fragmented, and shallow markets (the average national GDP is about $4 billion) do not offer economies of scale. Many African countries must overcome geographic handicaps: 40% of Africans live in landlocked countries with no access to the sea. Africa’s share of world trade has plummeted to a little more than 1%, and intra-African trade is low at about 10% of total African trade.
- Managing growing populations: Africa’s population will reach 1.5 billion by 2030, at par with both China and India, and 2 billion by 2050. By 2030 more than half its population will be under the age of 25 and the majority of people will live in urban areas, marking the transition from a primarily agrarian, rural continent. Only strong economic growth can create jobs for the millions of new workers entering the labor force each year.
- Sustaining natural resources: Population growth and climate change will put pressure on Africa’s land and water resources.. Continuous climate changes will threaten food security and foster disease and migration. Africa must also manage its commodity resources for maximum economic impact and diversification .
- Tackling Diseases: AIDS claimed 1.6 million lives in Sub-Saharan Africa in 2007. The epidemic, having already left more than 11 million orphans across the continent, is reversing decades of progress in lengthening the life expectancy of Africans. Tuberculosis is second only to AIDS as a cause of illness and death for adults, with 2.4 million cases and 540,000 deaths each year.8 Malaria continues to plague the continent, preying particularly on children and the poor.