Opening Remarks by Angel Gurría
Wednesday, 31 October 2018 - OECD, Paris
(As prepared for delivery)
Dear President Akufo-Addo, Commissioner Harison, Ministers, Excellencies, Distinguished Guests, Ladies and Gentlemen,
I am delighted to open the 18th International Economic Forum on Africa and honoured to welcome so many distinguished leaders from Africa. After 18 years, this Forum is an institution that remains relevant with its finger on the pulse of the continent.
I would like to thank our co-organiser, the African Union, and our Forum partners: Agence Française de Développement, Mashav (Israel’s Agency for International Development Co-operation), Institut de Recherche pour le Développement, AfroChampions and UBER.
What we will be focusing on today is precisely how we can design the policies which will lead to inclusion and ensure that everyone – families, farmers and businesses – reaps the benefits of Africa’s integration.
Let me begin with the good news. In March this year, African leaders agreed on a historic decision to create the African Continental Free Trade Area. 49 African countries have signed on so far, and as soon as 22 parliaments ratify it, the “one Africa market” will become the world’s biggest free trade area with a population of 1.2 billion people and over USD 3 trillion in GDP.
Moreover, 32 countries have so far signed the Protocol to the Treaty establishing the African Economic Community relating to the Free Movement of Persons, Right of Residence and Right of Establishment. While migration is often a force of disruption for many countries, this Protocol on Free Movement signals the political confidence and willingness throughout Africa to co-operate in this crucial area, to better manage migration and turn it into a pillar for development.
Over the past 15 years, Africa’s GDP has tripled, making it the world’s second fastest growing region with an annual average of 4.6% behind Asia (7.2%). Following a sharp slowdown in 2016, Africa’s growth is bouncing back, with this year’s growth reaching 3.7%, and expected to reach 4% annually between 2018 and 2020. Consumption growth is also expected to drive this process thanks to strong population growth, urbanisation and the higher purchasing power of an emerging African middle class.
In addition, African countries have diversified their trade partnerships. Between 2000 and 2016, Africa tripled its trade with the rest of the world, from USD 276 billion to USD 806 billion, with trade flows shifting from traditional to emerging partners like China and India.
And last but not least, we have long recognised the great potential and the benefits of African “unity”. Fully liberalising trade in goods, for example, could boost Africa’s GDP by 1% and total employment by 1.2%, intra-African trade could grow by 33%, and Africa’s total trade deficit could be halved.
Despite these positive achievements however, certain challenges persist. Although growth has increased, it has not sufficiently reduced poverty nor improved social inclusion and well-being – we must focus on achieving more inclusive growth.
Today, while extreme poverty has declined proportionally, 395 million Africans are still affected by it and evidence shows that in the future, poverty will increasingly be concentrated in the African continent.
In addition, 282 million workers are vulnerably employed, with women and youth affected the most. Only 12% of African women are on wage-paying employment, compared to 22% in Asia and 33% in Latin America and the Caribbean. About 42% of Africa’s working youth live on less than USD 1.90 a day. And it is estimated that by 2050, Africa will be home to one-in-four people on earth, while its working-age population is expected to increase by an additional 902 million.
In this respect, growth that creates quality jobs is key for the continent’s social cohesion. As I stressed at yesterday’s EMnet meeting, investing in infrastructure, helping laggard regions to grow, and enabling vulnerable people to accumulate productive assets are all critical in supporting inclusive growth. African governments must support the ongoing process of structural transformation through policies to boost investment to close the infrastructure gaps, strengthen the domestic private sectors, diversify production and exports, and deepen regional integration.
Inclusive growth and quality jobs in Africa also influence population movements. Data can help rationalise political discussions around this often contentious issue. In absolute terms, Africa is only the fourth continent of origin of international migration, with 36 million international migrants from Africa in 2017, after Asia (106 million), Europe (61 million), and Latin America and the Caribbean (38 million). The amount of remittances, transfer of know-how and trade networks across borders indicate that the migration-development nexus can actually be productive. These correlations need to be better studied to offer policies that are fit for purpose.
The OECD has been working with Africa for many years to address these challenges. With nine African countries currently members of the OECD Development Centre and with work underway across the house with institutions like the African Union Commission, the African Development Bank, NEPAD and the Sahel and West Africa Club, we are ready to further support solutions for inclusive, broad-based and sustainable development. Let me briefly provide some concrete examples of our main strands of work.
At this year’s MCM, our Ministers received a roadmap for advancing the OECD’s engagement with Africa by looking at domestic resource mobilisation; the investment environment, competitiveness and structural transformation; migration; education; and statistical systems.
We have been collaborating with the African Union to co-produce knowledge on socio-economic and institutional matters, through the first edition of the Africa’s Development Dynamics report, after having co-produced 17 editions of the African Economic Outlook with the African Development Bank and the UN Commission for Africa with the support of the European Commission. We have also been working on fiscal issues, through our Revenue Statistics in Africa work – and will be launching the 2018 edition of this publication today. We will also be launching the OECD / SWAC Africapolis database on African cities during the AFRICITIES Summit in Marrakesh on 22 November, allowing users to explore a wide range of population and geo-spatial data on African cities which are comparable across countries and time.
In addition, our latest data show that net bilateral ODA flows from DAC countries to least developed countries, most of which are found in Africa, increased by 4% in real terms in 2017, thus reversing the declining trend of previous years. We are also driving the use of blended finance. Between 2012 and 2015 official development finance unlocked USD 81 billion in private finance for development globally. Of that amount, some USD 5.5 billion of private capital went to LDCs.
In addition, the OECD is supporting work in the context of the Africa Advisory Group focused on domestic resource mobilisation and tax. Despite substantial progress since 2000, taxes represent on average around 19% of GDP in the 16 African countries covered in our new Revenue Statistics in Africa 2018 report, compared to close to 23% of GDP in Latin America and the Caribbean.
Through the OECD/UNDP Tax Inspectors Without Borders initiative, we are also providing on-field support to tax administrations in Africa. Of 34 ongoing TIWB programmes, 22 are taking place in African countries. TIWB has so far succeeded in collecting USD 414 million in additional tax revenues including 244.2 million in Africa alone. The return on investment is significant: for every dollar spent on TIWB assistance, 100 dollars have been collected in tax revenues.
We are also working with the African Development Bank, the Inter-Governmental Action Group against Money Laundering in West Africa, the NEPAD and the World Bank to study the negative impact of illicit financial flows – which exceed the amount of ODA provided to Africa – on the continent’s progress towards development goals.
And we are conducting country-specific programmes. This includes our close engagement with our Key Partner, South Africa, as well as our Multidimensional Country Reviews with Côte d’Ivoire, Senegal and Morocco, amongst others.
Last but not least, regarding our work in the context of international fora, the OECD provides support to the G20 Compact with Africa focusing on reform efforts in Côte d’Ivoire, Egypt, Morocco, Senegal and Tunisia to promote private investment. And under the umbrella of the G7 Deauville Partnership initiative, we have been providing hands-on policy advice and technical co-operation through 17 projects in Egypt, Libya, Morocco and Tunisia.
Ladies and Gentlemen:
This year, with the passing of Kofi Annan, we lost one of the world’s most inspirational fighters for multilateralism, openness and co-operation. We were privileged to host him as the Guest of Honour at the 2015 Africa Forum. I can think of no more appropriate tribute to Secretary-General Annan’s legacy than to support the development of Africa going forward.
Today’s Forum gives us the opportunity to continue working together and to design, develop and deliver better policies for better lives in Africa. I wish you a successful Forum. Thank you!