Africa is increasingly attracting attention for its economic buoyance and success in reducing poverty and is now viewed as an opportunity rather than a challenge, panellists told a Friends of Europe’s Development Policy Forum Africa Summit on 24 June.
The continent’s economies grew at an average of 5.2% a year between 2003 and 2011, and eight of the 10 fastest-growing economies in 2012 were African. This is slowly but surely translating in to a new Europe-Africa relationship based on eqaulity. EU aid is still important for Africa but funds are also pouring into the continent from foreign investors, remittances as well as better domestic tax collection. Europe needs to change its traditional relationship with Africa based on aid, while contributing in new ways and still helping efforts to maintain peace and security where needed.
“Today is the time to finally unleash Africa’s huge and unrivalled potential,” said Andris Piebalgs, European Commissioner for Development. “In recent years I have noticed strong willingness among African leaders and citizens alike to change the perception of Africa. They want Africa to become a continent of opportunity and success rather than a land of starving children and poverty.”
At the same time, the continent faces ongoing challenges. Home to the world’s youngest and fastest-growing population, Africa potentially has the labour force it needs to boost production and consumption. But that requires the creation of million of jobs.
There are currently 500 million Africans of working age, said Vincent Biruta, Rwanda’s Minister of Education. By 2040 that figure will rise to 1.1 bn. “This is a daunting prospect,” he said. “Our country needs to invest to turn our youth into a skilled workforce.”
One important goal is a workforce that can operate in a knowledge-based economy rather than just agriculture. Until recently, Africa has tended to focus on university education, but it now requires greater emphasis on primary education and basic skills, Biruta said. “We need to make sure that education meets the needs of the labour market.”
Generating new jobs requires moving beyond many African countries’ dependence on natural resource wealth, which makes them potential victims of the so-called “resource curse”. Under this, resource-rich countries sometimes fail to develop an economic infrastructure – such as skills and the rule of law – because they can, for the time being, live off the export of resources.
Low participation in global value chains
Foreign investment in Africa rose from $5bn in 2000 to $55bn in 2010, including significant investment in manufacturing and services. But Africa still lags behind Asia and Latin America in its participation in global value chains, which allow developing countries to develop areas of expertise and specialisation.
Around 60% of global trade is based on intermediate goods, as companies produce components and product parts for use in manufacturing processes in different locations, said Mario Pezzini, Director of the Organisation for Economic Co-operation and Development (OECD) Development Centre. “Africa is without doubt in the global value chain,” he said. “The challenge is to increase its participation in the new opportunities.”
Overall, said Hiroshi Kato, Vice President of the Japan International Cooperation Agency (JICA), Africa needs to become more inclusive and resilient. “Inclusiveness means nobody gets left behind, and no country must be left behind,” he said. That could be helped by developing regional integration and infrastructure, as well as promoting numeracy and literacy, which are conditions for effective participation in society.
Resilience means being able to withstand unexpected setbacks, from economic downturns to natural disasters. “The current African economic outlook is very good,” he said, “but we must be prepared for shocks.”
Africa is increasingly attracting attention for its economic buoyance and success in reducing poverty and is now viewed as an opportunity rather than a challenge.
Africa’s new “tiger economies” are helping to transform international perceptions of the continent. The first decade of the 21st century saw an unprecedented growth spurt, with six African countries in the world’s ten fastest-growing economies. Europe is therefore waking to a new vision of Africa, one in which its own trade and investments are slipping behind those of Asian and Latin American competitors. To stay relevant in an era of volatile geo-politics, Africa-Europe relations will have to become more strategic, political and geared to tackling 21st Century challenges, including climate change, human trafficking and pandemics.
Despite the rhetoric, how ready is the EU to embrace a new “Africa rising” narrative? Have Europe and Africa begun work on a new transformation agenda to tackle Africa’s many peace and security, as well as economic and social challenges? Can Africa and the EU thrash out a new trade relationship given disagreements over the Economic Partnership Agreements under negotiation? Can the EU do more to encourage regional integration in Africa? Are Europe and Africa working together to deal with rising inequalities in Africa? Are best practices on tax collection being shared and exchanged?
Senior Fellow at the European University Institute, former European commissioner for development and for energy, and Trustee of Friends of Europe
Vice President of the Japan International Cooperation Agency (JICA)
Director General for Africa at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
Alhaji Muhammad Mumuni
Secretary General of the African, Caribbean, and Pacific (ACP) Group of States
European External Action Service Managing Director of the Directorate for Africa
Managing Director at New Horizons Project
Foreign investments in Africa are on the rise, climbing up from $5bn in 2000 to $55bn in 2010 and forecast to hit $150bn by 2015. The good news is that minerals and hydrocarbons account for no more than a third of the total, with investment in manufacturing and services rising fast. Hopes for a wave of industrialisation in Africa are being fuelled by the introduction of technologies and mobile telephone while advances like 3-D
printing may soon promote manufacturing operations that generate jobs.
But Africa lags far behind Asia and Latin America as regards participation in global value chains which allow developing countries to develop specific skills and products for participation in international production networks. What role could such global value chains play in Africa’s economic development? What can be done to promote Africa’s role in such networks? What are the key elements of a successful strategy for participating in such production chains? How can these production chains boost the modernization of African agriculture and promote agri-businesses? Are there any African success stories that can be replicated in other countries?
On the occasion of the European launch of the African Economic Outlook 2014, jointly published by the AfDB, OECD Development Centre and UNDP.
Director of the OECD Development Centre
Secretary General for Africa at Total
European Commission Deputy Director General for Development and Cooperation—EuropeAid (DEVCO)
Director of Development Research at the African Development Bank (AfDB)
Managing Director at New Horizons Project
Estimated at about one billion today, Africa’s population is expected to more than double by mid-century. This contrasts with the fact that the continent’s economy is worth only $1.6 trillion a year is in purchasing power terms representing a small 2.5% of the world economy. Africa also has the youngest population in the world.
The key question for Africa’s policymakers is whether – like many Asian governments – they can convert this runaway population growth into a true demographic dividend by providing employment and economic opportunities to young people. Failure to do so can lead to social unrest, political strife, immigration and a rise in extremism. Agriculture can provide jobs in Africa but is too-often neglected by governments and development partners. What policy agendas and educational strategies are needed to take advantage of Africa’s expanding workforce? What can be done to improve job generation in Africa, especially in the agriculture, services and manufacturing? What is being done to improve the skills and talents of young Africans?
Founder and Chairman of Investeq Capital and Managing Director of Homa Afrika, Kenya
Founder and Managing Director of the African Entrepreneur Collective (AEC)
Founder and Chief Executive Officer of Rekindle Learning, South Africa
Rwanda Minister of Education
Louis Onyango Otieno
Director of Microsoft 4Africa
Managing Director at New Horizons Project
Andris Piebalgs is an experienced Latvian politician who occupied key positions at both the national and European level. He is currently a member of the Latvian political party UNITY. Previously, he worked in the Latvian diplomatic service, first serving as the Ambassador of Latvia in Estonia where he helped to solve the sea border issue between the two states. He went on to become the Latvian Ambassador to the EU helping to establish Latvia as the EU candidate country. Afterwards, Piebalgs served as the European Commissioner for Energy, then as European Commissioner for Development.
Hiroshi Kato is an expert on international development, development effectiveness and global development agendas. In addition to his current position, he is also the Director of the JICA Research Institute. Prior to joining JICA, Kato was a Visiting Professor at the Graduate School of International Cooperation Studies at Kobe University.
Proksch has been Director General for Africa since 2007. He also holds the position of International Chairman of the International Learning Network on Capacity Development (LenCD). He is in charge of all programs and projects of GIZ in Africa with an overall annual turnover of around 300 million Euros. He has been actively involved in development policy and cooperation for nearly 30 years. He held high level-managment position while working for several years in Nepal, Pakistan, Ecuador and Vietnam. He is a well-known specialist on governance, decentralisation and capacity development.
Prior to his function as Secretary General of the Africa Caribbean Pacific (ACP) Group of States, Mumuni served as Ghana’s Minister for Foreign Affairs and Regional Integration and as Minister for Employment and Social Welfare. Mumuni was elected Member of Parliament for a third time, before taking office as ACP Secretary General.
In his current capacity, Vervaeke is responsible the EU foreign affairs as well as the programming of the EU financial cooperation in the region. He has also been appointed Senior EU Coordinator for the Great Lakes region, working closely with the EU Delegations, the European Commission and EU Member States to advance European objectives of peace and prosperity in the region. Before taking up this post, Vervaeke was the EU Special Representative to the African Union and the Head of Delegation of the European Commission Delegation to the AU in Addis Ababa, Ethiopia.
Pezzini has held several positions since he joined the OECD in 1995. He has been Economic Advisor for various international organisations and think tanks in the field of economic development, industrial organisation and regional economics. His work mainly focused on policies for clusters and networks of small and medium sized firms, as well as policies to valorise natural and cultural resources.
Prior to his appointment as Secretary General for Africa, Abiodun headed the company’s business development division in Nigeria. From 2004 to 2008, he was Project Director at Total EP, Paris, responsible for proactive business origination and negotiation for Sub-Saharan Africa.
Cornaro has been working in the European Commission Development and Cooperation Directorate for several years, where he started as Director for the European Neighbourhood, responsible for EU funding for Eastern Europe, Middle East and Africa. Since 2012, Cornaro has been overseeing all EU funded development activities for partner countries in Africa, Asia and the Pacific, the European Neighbourhood, Latin America and the Caribbean, as well as with the Overseas Countries and Territories. He acquired extensive experience in the development policies while working in Mali, Zimbabwe and Uganda for the United Nations Development Programme (UNDP) and the Austrian Foreign Service.
Kayizzi-Mugerwa is Director of Development Research at the African Development Bank. He has also been Regional Director for East Africa, Director for Policy, Lead Economist and Head of the Extended Mission to Zimbabwe. He was previously Project Director at the UN University’s World Institute for Development Economics Research in Helsinki and Senior Economist at the IMF. He has published several articles on macroeconomic policies and development in Africa.
Investeq Capital Limited provides financing and financial solutions to small and medium sized enterprises (SMEs) across the African continent. Awendo has over 20 years of post qualification experience in audit, accounting, management consultancy and corporate finance advisory. Awendo is a board member of various SMEs as well as member of the advisory board of the Kenya Institute of Management.
The African Entrepreneur Collective (AEC) is a business accelerator for young, growth-oriented entrepreneurs in Africa to aid them in the creating of jobs within their communities. Oyler has more than 10 years of experience working in education and international development. She is a visionary strategist, passionate about developing human capital, and rooted in data-driven decision-making, who understands the tremendous need for opportunities to bolster small-medium enterprise development with a focus on local relevancy.
Rekindle Learning is an education technology company that delivers mobile learning aids. Rekindle’s learning applications utilise the latest pedagocic trends to ensure effective and long-term learning. Rekindle Learning as been quoted as ‘the internet’s transformative potential in Africa and a striking innovation in mobile learning’. Rabana has received mutliple awards and honours. She has been listed among the Forbes ‘30 under 30 – Africa’s Best Young Entrepreneurs’ and among the 2013 ’20 Young Power Women In Africa’.
Biruta’s work as Minister of Education has proven to be successful in facilitating access to primary education. In fact Rwanda has the highest primary school enrolment rates in Africa, gender parity at primary level and the country is on track to achieve universal access to primary education by 2015. Rwanda won the Commonwealth Education Good Practice Awards 2012, for the innovative fast-tracking strategies of the 9 Year Basic Education Programme.
Louis Onyango Otieno is the Director of Microsoft 4Africa, a strategic initiative focused on supporting Africa’s development towards global competitiveness. The numerous innovations he has accomplished in his overall career prove his passion for ICT and development. He played a leading role in the localisation of Microsoft Office & Windows into Kiswahili and the ‘TV White Spaces’, enabling high-speed, low-cost broadband access into the un-served rural Africa.
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