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Friday, 18 January 2019

This is how African economies are likely to perform in 2019



Africa’s general economic performance continues to recover and GDP growth is projected to accelerate to 4.0 percent in 2019 and 4.1 percent in 2020. But improved macroeconomic and employment outcomes require industry to lead growth, according to the 2019 African Economic Outlook report.

The focus of the 2019 report on regional integration for Africa’s economic prosperity, highlights integration for trade and economic cooperation and the delivery of regional public goods.

In opening remarks to diplomats, government officials, policy makers and students gathered at the Bank’s Babacar Ndiaye auditorium in Abidjan, Cote d’Ivoire, Senior Vice President Charles Boamah said even though the report presents daunting challenges, “Africa has the means to overcome them by joining hands together and removing barriers to integration and drivers of migration.”

The 2019 African Economic Outlook report analyses gains of regional public goods, including synchronizing financial governance frameworks, opening regional aviation to competition, and facilitating the free movements of people, goods, and services through open borders.

Highlights:

The 2019 report, which focuses on three key areas - Africa’s macroeconomic performance and prospects; jobs, growth, and Integration for Africa’s economic prosperity.

The Bank’s Director of Macroeconomic Policy Forecasting and Research Department, Hanan Morsy, provided participants with the report’s “storyline” and noted that in spite of a rising national debt across Africa, “there is no systemic risk of debt crisis.”

At the current rate of labour force growth, Africa needs to create about 12 million new jobs every year to prevent unemployment from rising. The report states that a “concerted industrialization effort that builds on countries’ comparative advantage,” is required.

At the core of African integration, the African Economic Outlook suggests that “a borderless Africa” is one of the key foundations of a competitive continental market that could serve as a global business center.”

The Continental Free Trade Agreement (CFTA), signed in March 2018 by 44 African countries, offers substantial gains for all African countries the report says, citing new data and analytics.

“To develop cross-border supply chains, improving customs management and adopting simple and transparent rules of origin, are essential,” the report notes.

Significantly, the report identifies five key trade policy actions that could potentially bring Africa’s total gains to 4.5 percent of its GDP, or $134 billion a year:
  • eliminating all applied bilateral tariffs in Africa;
  • keeping rules of origin simple, flexible, and transparent;
  • removing all non-tariff barriers on goods and services;
  • implementing the World Trade Organization’s Trade Facilitation Agreement to reduce cross-border time and transaction costs tied to non-tariff measures; and 
  • negotiating with other developing countries to reduce their tariffs and non-tariff barriers, by 50%.
The African Economic Outlook bridges a significant knowledge gap with respect to African economies through regular, rigorous, and comparative analysis.

It also provides relevant and essential reference material on Africa’s economic development, for researchers, investors, civil society organisations, and development partners.

A full set of updated growth projections will be released in May 2019, ahead of the Bank’s Annual Meetings in Malabo, Equatorial Guinea.

The full report is available online in English, French, and Portuguese at: http://www.afdb.org/aeo

-Content supplied by the African Development Bank
-Image: Pixabay 

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