Antananarivo, 5 November 2019 - African firms are the key to the economic transformation of the continent, but they need governments to create better conditions for them to thrive, according to the second edition of the African Union Commission’s (AUC) economic report produced in collaboration with the OECD Development Centre. Without bold policy changes, most African businesses may not be ready for reaping the benefits of the African Continental Free Trade Area Africa (AfCFTA) which is projected to offer African firms the new opportunities of a 1.2 billion consumers strong continental market.
Africa's Development Dynamics (AfDD) 2019, released today, shows that Africa’s expanding domestic markets offer great opportunities for transforming production systems across the continent. Africa recorded 4.6% annual gross domestic product (GDP) growth between 2000 and 2018; with domestic demand accounting for 69% of it. The continent’s growth is projected at 3.6% in 2019 and should remain robust at 3.9% between 2020 and 2023. The regional demand for processed food has been growing 1.5 times faster than the global average. Large Pan-African firms and some dynamic start-ups are seizing these opportunities to grow, as highlighted in the report.
However, the report finds that Africa needs more dynamic enterprises to turn these opportunities into higher profits, more investment and new, decent jobs. This is especially true of small and medium enterprises in employment-intensive sectors:
“Accelerating the development of Africa’s productive sectors is critical to meeting the objectives of the African Union’s Agenda 2063. We must shake the structure of our economies to create strong, robust and inclusive growth, with new jobs and opportunities for all”, said H.E. Prof. Victor Harison, Commissioner for Economic Affairs of the AUC, while launching the report. Progress in quality job creation is too slow: in some countries, almost 91% of the workforce outside of the agricultural sector remains in informal and vulnerable employment.
AfDD 2019 puts forward a systemic approach to productive transformation by focusing on three sets of policies:
“The entry into force of the African Continental Free Trade Area in 2019 marks a strong commitment by African leaders towards productive transformation. But it will work if African firms are strong enough to compete in this new, enlarged market. They need bolder and smarter government policies to support them”, stated Mario Pezzini, Director of the OECD Development Centre and Special Advisor to the OECD Secretary-General on Development.
The report provides detailed analysis and recommendations for each of the five African regions.
To consult Africa's Development Dynamics 2019, visit https://oe.cd/afdd2019
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Note to Editors:
Africa's Development Dynamics is an economic report produced by the African Union Commission in collaboration with the OECD Development Centre. Introduced in 2018, the report is designed to deepen dialogue and international collaboration on the pan-African agenda of integration and transformation in line with the vision and aspirations of Agenda 2063. Other joint projects between the African Union Commission and the OECD Development Centre include the organisation of the yearly International Economic Forum on Africa and the Revenue Statistics in Africa report.
The African Union and the OECD Development Centre are thankful to the African Capacity Building Foundation for its engagement in this report. The OECD Development Centre is grateful to the European Commission, Germany, Italy and Portugal for their additional support to this second edition.