11 February 2016

Africa: Four Challenges for Africa in 2016

analysis

2016 leads Africa into a new era in international cooperation. The migration and refugee crisis, terrorism, violence and fragility - all triggered by or mixed with the very visible impacts of climate change - are stark reminders that action on multiple fronts cannot be postponed.

These challenges are interconnected and need to be tackled together.

Four major conferences in 2015 set out a package of global agreements on trade, development financing, climate change and the United Nations' new Global Goals, which provide a good base for a more systematic and comprehensive approach to address some of today's global challenges.

2016 confronts us with the task of turning these grand words into deeds and Africa will need to move decisively to put its global commitments into practice.

A new paper by the European Centre for Development Policy Management (ECDPM) outlines a number of challenges for Africa in 2016.

1. Mobilising African resources for African development

Domestic resources have been by far the largest source of financing for development over the past decade. African countries have therefore welcomed the recognition and stronger focus on using domestic revenues at the Third UN Financing for Development conference in Addis Ababa last June.

But Africa will face serious challenges as economic growth is projected to slow down in a number of countries on the continent in 2016.

Structural transformation, economic diversification and addressing Africa's energy and infrastructure bottlenecks will therefore be key to continuing the pace of Africa's economic transformation.

African countries lose nearly US $60 billion a year to tax evasion.

Illicit monetary flows, tax evasion and mispricing are facilitated by the inefficiencies of the global financial system.

The Addis Tax Initiative launched in 2015 committed international donors, African and other developing countries to double technical cooperation on tax reform and domestic revenue mobilisation by 2020. In 2016 governments and civil society need to ensure that these commitments are met.

2. A global economic slowdown

African countries will need to focus on growth in 2016. Declining commodity prices and sluggish economic prospects in Europe and China are likely to slow down African economic growth.

Already, a collapse in the prices of oil and certain minerals has prompted large extractive companies to put greenfield projects on hold.

This should stimulate African governments, especially those in the mineral-rich and oil-dependent states, to press on with economic diversification and industrialisation.

Economic transformation will be conditional on the capacity of African economies to scale up their participation in global value chains. This will require creating economic opportunities at the national and regional levels. The creation of a Tripartite Free Trade Area in Eastern and Southern Africa is a potential game changer here, and could be the springboard for an ambitious continental free trade area in 2017 and an Africa-wide customs union in 2019, if certain political and technical hurdles are addressed.

Better connecting markets by improving cross-border infrastructure, energy access and scaling up the digital economy could lower the cost of trade and boost industrial development.

3. Making progress in food security, nutrition and sustainable agriculture

Food security, nutrition and sustainable agriculture continue to be a major concern in Africa. The Comprehensive Africa Agriculture Development Plan (CAADP) and the Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods aim to end hunger by 2025. Yet, the proportion of undernourished people in sub-Saharan Africa remains at around 23%.

Insufficient investment in agriculture and social protection continue to be bottlenecks to increasing food availability.

Agricultural production and food security in Africa are being compromised by the effects of climate change, and these effects are expected to become fiercer. Indeed, recurrent food security crises in the Horn of Africa and Sahel provide stark evidence of the need to build the region's' resilience and ability cope with recurrent droughts. Given that the bulk of Africa's agriculture is climate-dependent, the only way forward is for African agriculture to become climate-smart.

Many gaps remain between processes at the continental, regional and national levels and these will have to be addressed in 2016 in a more concerted way. Initiatives such as the Africa Solidarity Trust Fund could offer innovative approaches to foster cooperation between African countries and regions in tackling common challenges in terms of agriculture and food security.

4. Will new leadership bring new opportunities?

The incoming African Union Commission of 2016 will have the opportunity for Africa to build on the global momentum towards sustainable development. Strong leadership will be needed in addressing the challenges facing the African continent in economic development, industrialisation, food security, climate change, human security and governance.

The AU Commission is currently working to finalise guidelines for the delivery of the African Union's Agenda 2063 in individual African countries. This provides an opportunity for integrating the SDGs into Africa's own policy frameworks, but inevitably also raises questions of financing and the monitoring of progress - acute challenges in countries with limited means.

Human rights and democracy continue to climb the agenda in Africa and the African Union has declared 2016 the 'African Year of Human Rights' - yet it remains to be seen how it will mark this or support progress in any tangible way.

In dealing with critical portfolios and continental challenges, the new African Union Commission will have to work with new leaders across Africa as a number of key elections take place in Uganda, the Central African Republic, Ghana and Chad. But such changes may also provide opportunities to build on a global momentum for change.

James Mackie is Senior Advisor and Rhys Williams Communications Officer at the European Centre for Deveopment Policy Management.

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