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HomeNewsRwanda: African economies need transformation through 'growth with depth'

Rwanda: African economies need transformation through ‘growth with depth’

African economies need ”growth with depth” if they are to transform by diversifying their production, making their exports competitive and increasing productivity to improve human well-being, according to a new report released here Monday.

The 2014 African Transformation Report sees the impressive economic growth of many African countries since the mid-1990s as well as the progress in governance and turnaround in investor confidence as a solid foundation for transforming these economies.

This is the first report produced by the Accra, Ghana-based African Centre for Economic Transformation (ACET), an economic policy institute supporting Africa’s long-term growth through transformation, with a vision that by 2025 all African countries will drive their own growth and transformation agenda.

According to Liberian President Ellen Johnson Sirleaf, nowhere is the need for such a transformative shift greater than in Africa.

In a  foreword to the report, she said the key dimensions of the African Union’s transformation vision for 2063 are to address the continent’s output and trade, strengthen infrastructure and human resources while modernising Africa’s science and technology.

As co-chair of the UN High Level Panel on the Post-2015 Development Agenda, President Sirleaf recommended the report to African policymakers as they draw up action plans to transform their economies and ensure that growth is sustained to improve the lives of an increasing number of Africans.

The report assessed some countries as case studies on the transformation platform and singled out Ethiopia as an economy that has registered rapid recovery and bid transformation plans.

“Ethiopia’s ambitious growth and transformation plan envisions maintaining real GDP growth of 11 percent and building an economy with modern, productive and technologically enhanced agricultural and industrial sectors,” the report said.

On Senegal, the report noted that the West African country has a relatively-high manufacturing base, with a 14 percent share in GDP in 2010, but that unemployment has not changed much in the country.

“Unemployment affects women and youth much more. Youth unemployment was 12.7 percent in 2011, and was 13.3 percent for women, compared with 7.7 percent for men,” the report said.

Querying whether Nigeria is the giant waking up or not, the report said the country’s overall growth has not translated into a strong diversified economy.

While oil, gas and agriculture continue to dominate the country’s GDP, contributing about 70 percent of total output, formal employment remains low and extreme poverty persists, at about 68 percent of the population in 2010.

Against the background of the destruction from the 1994 genocide and the post-war resource constraints, the ACET report said Rwanda was a case study of success in post-conflict reconstruction.

“Invigorated by its leadership and the ability to guide national development, Rwanda has made great strides in improving the business environment.

“Private investment has risen since the introduction of a revised tax code and implementation of business reforms after 2005. Exports have increased and export diversification is beginning in areas prioritised by government,” the report noted.

“Our report recognises that transformation doesn’t happen overnight but is a long-term process. It requires constructive relationships between the state and the private sector,” said K.Y. Amoako, ACET president and former Executive Secretary of the UN Economic Commission for Africa.

“We think that African countries should take this opportunity to rebuild on recent developments, aiming at growth with depth that will produce and export more. We should learn how to do that through application of modern technologies and create productive employment for the population,” Amoako remarked at the launch of the report on the sidelines of this year’s Annual Meetings of the African Development Bank.

Over the last two decades, Amoako pointed out, many African countries were able to make a tremendous jump in IT.

“Therefore, we need to have strategies and plans of using technologies,” he said.

Also, he hinted that the next ACET report would focus on agricultural transformation, with attention being paid to the linkages between production and processing in order to generate jobs in Africa.

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