Marrakesh, Morocco, March 23, 2019 -- African countries need to grow their economies faster if they are to achieve the Sustainable Development Goals by the target date of 2030, the Economic Commission for Africa (ECA) says in its annual report.
The SDGs can be achieved by carrying out comprehensive macroeconomic reforms to build resilience, raise potential growth and improve inclusiveness, says the Economic Report on Africa (ERA), released today in Marrakesh, Morocco.
To accelerate growth to double digits by 2030, Africa needs to boost investment from its current 25 per cent of GDP —much lower than the 32 per cent in East Asia and the Pacific— to 30–35 per cent, and substantially improve productivity,” according to the Report. “The domestic drivers include sustained investment in infrastructure and strong private consumption, along with higher oil production (from new fields) and favourable weather.”
The continent’s gross domestic product (GDP) is projected to rise to 3.4 per cent this year from 3.2 per cent in 2018 and to 3.7 per cent in 2020 on the back of rising private consumption, rising and sustained public investment, higher commodity prices, current oil exploration and production and favourable weather, it says.
“However, most African economies face downside risks to growth from the tightening of monetary policy and new protectionist policies in advanced economies; weather-related shocks, especially in agriculture-dependent economies; threats of terrorism and conflict; political instability and high chance of debt distress in some countries,” says the ERA.
The Report, in a section on recent economic and social developments, says Africa’s progress in poverty reduction remains steady, albeit slow, because poverty reduction has not kept up with population growth.
“So even as the poverty rate falls, the number of people in absolute poverty has remained around 390 million,” adding that women represent a proportionately higher percentage of the working poor as the gender gap in Africa is still tilted in favour of men.
On the proposed African Continental Free Trade Agreement (AfCFTA), the Report says the reforms it will create can help to reduce the negative effects of external shocks on African countries and also enhance trade performance as well as assist their integration into global value chains.
The 2019 edition of the Economic Report on Africa whosetheme is “Fiscal Policy for Financing Sustainable Development in Africa”, examines the institutional and policy reforms that can enable African countries to maximize domestic public resource mobilization to finance their development agenda, focusing on the instrumental role of fiscal policy. The report identifies several quick wins in Africa’s pursuit of additional fiscal space to finance achievement of the Sustainable Development Goals (SDGs) and the aspirations of Agenda 2063.