While Africa shows many opportunities for the future, it is now a question of knowing how to exploit these opportunities for inclusive growth of the continent, and the rest of the world.
Prime Minister Edouard Ngirente made the remarks on Monday, November 27, while addressing the Kigali Economic Forum, taking place in Rwanda to, among others, discuss Africa's role and place in the global economy.
The two-day forum convened several high-ranked officials including the Secretary-general of the Organisation Internationale de la Francophonie (OIF), Louise Mushikiwabo, Jean-Hervé Lorenzi, the President and Chairman of the French think-tank Le Cercle des économistes, envoys, among others.
It is expected to discuss the continent's key issues such as youth employment, education, women empowerment, economic governance, climate change, tech, as well as, investment and finance.
Ngirente complimented Professor Jean-Hervé Lorenzi and, through him, the entire circle of economists, for choosing Rwanda, as the host of the annual event.
This development, he pointed out, takes place in a global context and continental marked by a certain number of challenges.
"We are confronted, among other things, with harm persistent effects of the Covid-19 pandemic, inflation in most of our countries, food insecurity in some corners of the world, climate shocks that affect our populations and trade negatively impacted by geopolitical relations,"
"These crises have had a negative impact on the economies of our countries by reducing, among other things, their Gross Domestic Product."
For example, Ngirente added, the International Monetary Fund (IMF) projects global growth at 3 percent growth in 2023 and 2.9 percent in 2024, a reduction compared to 3.5 percent in 2022 and much lower than the average of 3.8 percent over the last two decades.
The average GDP (Gross Domestic Product) of Africa sub-Saharan Africa is projected at 3.3 percent in 2023, and 4.0 percent in 2024.
At the same time, Ngirente told a packed hall at the Kigali Convention Center (KCC), that macroeconomic fundamentals remain quite weak citing costly financing, inflation higher than in the pre-covid period, high pressures on exchange rates, among other examples
"In all this, Africa remains the most affected region."
"In this context, it is high time to take stock of the opportunities and potentialities to be seized to respond to these crises."
Beyond the dialogues
All the bottlenecks, Ngirente said, demonstrate the importance of forums such as the Kigali Economic Forum, because it provides a platform on which to reflect collectively on the problems of the world and to reflect on the significance of facing it in solidarity.
"And now we are happy that people can sit down together to discuss the opportunities available by the continent and how to exploit them for the common global interest."
"Indeed, Africa shows many opportunities for the future but it is now a question of knowing how to exploit these opportunities for inclusive growth of the continent and the whole world. The continent must therefore fully assume its role and actively contribute to shaping the future of the world."
Youth demography is a plus
Sharing the African population as an example, Ngirente maintained that several experts agree to recognize the African youth population as an asset.
"But we all recognize that for this young population to be useful to the continent, it must be well trained, we need to give him training that allows you to enter the job market and be sufficiently productive."
He added, "Hence the importance of strengthening the capacities of young people, training for different professions and the development of talents of young people in different fields.
"In this context, the constant is that the crises of these three recent years have resulted in an increase in unemployment, particularly among young people."
In Sub-Saharan Africa for example, the unemployment rate of young people aged 15 to 24, increased by 9.7 percent from 2018 to 2022.
In addition to this problem of productivity and youth employment, another challenge, he said, is that of Africa's place in the value chain or production.
For example, in 2021 Africa imported $428 billion in manufactured goods while it exported $127 billion, exposing that much remains to be done in this area of production, transformation, and commerce or distribution.
"We must recognize that we cannot develop effectively without a regional approach."
Ngirente asserted that intra-African trade still remains weak, representing approximately 15 percent while the remaining is exchanged with the rest of the world.
"However, it is still important to note that the intra-African trade is a key element of economic transformation of Africa because it allows to increase the technological content of exports."
Equally challenging he said, is that medium or high technology products represent 27 percent of total intra-African trade in goods, twice more than for African exports to the rest of the world.
"The energy transition in Africa is a major engine for the sustainable development of the continent. To achieve this, it is necessary for the continent to benefit from its wealth in strategic minerals."
"If nothing changes, the continent will remain at the bottom of the scale of the value creation chain of these production chains rapidly growing global."
Who is to blame?
Over the last three years, the tax space of several governments has weakened, forcing them to resort to private capital with more difficult financing conditions more difficult.
Ngirente said that in a context where Africa suffers from a perception of high risk, there is a need to change that image.
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"What role do governments, creditors, and regional financial centers play in this
Process? Even today, Africa is seen as having the potential to become the engine of growth and global development in future decades."
"It is time to make the necessary changes."
In a related development, Prof Lorenzi reiterated that the risk premium required by investors for any investment in Africa is very overvalued, describing it as a major problem faced by African economies.
He went further to suggest that, "It would be very useful to have an African rating agency. It also seems desirable to create stability mechanisms in Africa, allowing countries in financial difficulty to have financial support."
"There are many financial centers in Africa, but perhaps we still need to develop these financial center networks, the development of Rwanda's financial center by being the first example."
Professor Lorenzi said that the meeting is being hosted in an exceptional example of African economic growth, and to the country's placement in second place in Africa in "Doing Business" and the global skills ranking, but also its world-leading position in terms of women's involvement in debate policy.
During these next two days, he said, we suggest that you undertake a course in seven stages including sessions on the training of youth, women in the heart of African economies, investment projects, technology and artificial intelligence, new economic governance, growth inclusive and sustainable, and finally the financing of economies.
