"Africa can have a brighter future, and has the potential to become the next emerging market by the end of this decade... Also, the continent's long-term growth prospects are strong, propelled by both external trends in the global economy and internal changes in the continent's societies and economies."
These were the messages shared by the African Development Bank on Friday, November 2, the closing day of the seventh African Economic Conference in Kigali, Rwanda.
On behalf of the Bank, one of the conference organizers, Mthuli Ncube, AfDB Vice President and Chief Economist, touched on a variety of issues, providing a broad overview of the key presentations during the conference. He affirmed that Africa has some of the most abundant natural resources in the world, many of which are yet to be tapped. These include not just minerals and oil, but also bountiful possibilities for clean energy. He observed that Africa is the world's youngest continent, and if it invests in education and training to develop the potential of its youth, could become one of the most dynamic and productive of economies.
Linking inclusive growth and sustainable development to democracy
Asked how the continent can reach inclusive and sustainable development goals, with lack of democracy in some countries, Prof. Ncube mentioned political events which led to revolutions and stirrings of discontent across a number of countries. "Africa cannot develop without democracy, which is a prerequisite to improve governance and manage the ethnic tensions that impede and frustrate African development efforts. As a matter of fact, electoral democracy is becoming institutionalized in several African countries, acting as a powerful force for economic growth and development, he noted, adding that there is a two-way relationship between democracy and development.
The Chief Economist referred to Botswana and Mauritius as "the only" two African countries that have been continuously peaceful and democratic since independence, and that have achieved relatively good development performance in the past three decades. "African countries that democratized during the 1990s have made some development progress, while lingering semi-democracies and autocracies performed much more poorly as a group and have continued to slide backwards," he said.
Africa, emerging as a force in the global economy
Sustaining peace, democracy, political stability, commitment to reform, and policies liberalizing trade and markets can magnify the impact of the forces already reshaping the continent's economic, political and social terrain. If these trends continue, Africa will emerge in the coming years as a significant force in the global economy - a place where engagement is no longer driven primarily by aid and humanitarian sentiments, but rather where economic opportunities and the potential therein for mutual benefit form the basis not only for a new social contract between African governments, businesses and civil society, but for true partnerships between Africa and its international partners.
Discussions at the conference also focused on youth employment and growth. Prof. Ncube said that young Africans are finding themselves excluded from the labour market and the formal economy, and are face rising unemployment. Those that are employed are frequently marginalized or forced to work in the informal sector, where they face poor working conditions. As a result, unless we can find a way to promote inclusive growth, then growth may become a source of instability.
The Bank's Chief Economist also said that the continent needs policies that maximize its comparative advantage and bring about the necessary structural changes in its economies, as well as to invest far more in its young people and in the hard and soft infrastructure required for growth. "The continent needs institutions that are capable and responsive, and leaders in politics, business and society willing to behave in a democratic and accountable manner."
Where do we go from here?
Concluding the interaction, the Bank's Chief Economist underscored that the key challenge of the 2012 AEC is how to promote growth that provides opportunities for all to participate in its enhancement and benefit from it. In other words, while growth is a necessary condition to poverty reduction, it is not sufficient. "Economic growth that is not equitable, broad-based and does not create jobs and opportunities for women and the young has no resilience," Professor Ncube said.