New report criticises Africa's 'jobless growth'

Africa’s high growth in the past decade has created only a few jobs and the continent’s share of exports in international trade has reduced from 5.9 per cent in 1980 to 3.3 per cent in 2013, the 2015 Economic Report on Africa (ERA) says. The report, launched in Kigali, yesterday, says employment in Africa grew at an annual average of 2.9 per cent from 1991 to 2012, and although comparatively higher than other regions such as Latin America, it’s not enough considering that Africa also has the highest population growth rates in the world. On one hand, Africa is being praised for its strong growth but on the other, population growth rates on the continent are faster than the growth rate and not creating enough jobs for young people joining the labour market every year. The 180-page report, which is a flagship product of the United Nations Economic Commission for Africa (UNECA), calls on African governments to make a bigger push for industrialisation through effective trade policies and fast-tracking regional integration to widen market bases. Africa’s industrialisation, the report authors noted, should also take advantage of the continent’s abundant and diverse resources, including agricultural and mineral resources. “Countries should shape their national trade policies and activities in bilateral, regional and multilateral trade negotiations across the length and breadth of the continent to consistently give priority to industrialization,” said Antonio Pedro, UNECA’s director for the eastern region. The report singles out commodity-based industrialisation as Africa’s best comparative advantage and calls on governments to make a deliberate shift from exporting primary commodities in their unprocessed form, to start adding value to the resources through industrial processing aided by abundant human capital. Rwanda’s Finance and Economic Planning minister Claver Gatete lauded the report calling it is a ‘useful reference source for countries to use as a starting point to draw the right policies required to boost industrialisation.” “Reports like this are important because they help in mobilising the necessary political will required to get things done,” Gatete said, adding that many of the things Africa needs require not money, but decision and commitment to their implementation. But Gatete also cautioned against the tendency to make generic conclusions about Africa, noting that one right model for a country may not necessarily be useful for the other. In Rwanda’s case, Gatete told participants at the report’s launch that the government is championing the services and industry sectors to drive the country towards the targeted 11.5 per cent economic growth and help create at least 200,000 off-farm jobs annually. Africa’s projected growth of 5.5 per cent, although better than many other regions in the world, the report notes, isn’t strong enough for structural transformation and, as a policy proposal, suggested that governments consider moving resources from low to higher productivity sectors. “Structural change is the key to moving African economies towards higher productive sectors, thereby boosting job creation and reducing informal sector,” said Andrew Mold, a senior economic Affairs officer at UNECA. Free trade area Leonard Rugwabiza, the chief economist at the Ministry of Finance and Economic Planning, who was on the three-man panel that discussed the report’s significance, pointed out that transformation is taking place in Africa but not fast enough to create the desired impact. “Certainly not enough for Rwanda, we need more; others may argue that through importing, Africa will eventually learn how to export but how long will this take? Certainly too long for us to wait, so we need to import industry know how to Africa to get us started,” said Rugwabiza. Rugwabiza also expressed disappointment at the pace of African efforts to integrate noting that, at the current rate, it would require at least a century to create the Continental Free Trade Area (CFTA), which is being mooted to improve intra-Africa trade. “The EAC is a good example that a free trade area is actually possible, but also a lesson about the role of strong political will to making things work. The EAC free trade area can inspire efforts towards a Tripartite for ECOWAS, EAC and COMESA and, finally, the Africa-wide FTA,” he said. Also on the panel was Hannington Namara, the country director of TradeMark East Africa. Namara proposed that with regional integration providing new market linkages and increasing connectivity, the debate should now concentrate on how Africans can produce more to exploit the larger markets. “What we have now is a tendency for people to buy from one place and sell in the other without really producing new commodities or adding value to primary commodities,” Namara said. Leadership deficit Prof. Humphrey Moshi, from the University of Dar es Salaam, lashed out at the tendency to pass so many proclamations aimed at transforming Africa but without actually following them up with actions. “Africa is suffering from a governance deficit, we need leaders to move us from proclamations to actions,” he said, adding that praising Africa as doing well is dangerous as it makes its leaders ‘too comfortable.’ Moshi said, over the past years, African leaders have failed to prove their capacity to implement so many proclamations aimed at transforming the continent with the latest being the Agenda 2063, which aims at creating a United States of Africa. However, Moshi said the agenda, like many other attempts in the past, is likely to fail unless leaders can follow up their visions with actions. Although in agreement with the professor that Africa needed to back visions with actions, Minister Gatete said East African partners on the Northern Corridor integration projects initiative have showed that where leaders are willing and committed, things actually work. “Many of the things we have achieved on the Northern Corridor required only decisions and political will, not money; action was taken on decisions that were made and things happened; now this trend is spreading to the Central Corridor,” Gatete said. editorial@newtimes.co.rw

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New report criticises Africa's 'jobless growth'