High-Level Launch of Africa’s Development Dynamics Report 2021, 19 January 2021

 

Remarks by Angel Gurría,

Secretary-General, OECD

Paris, 19 January 2021

Dear Commissioner, Ministers, Friends,

I am honoured to launch the Africa’s Development Dynamics 2021 report. This is a joint effort led by the African Union Commission and the OECD Development Centre and this year it focuses on a critical issue: digital transformation for quality jobs.

The third edition of this report comes at a critical moment. COVID-19 hit a world already afflicted by major imbalances, sluggish growth, weak investment and deficient welfare systems. The crisis’ effects have been devastating. Our latest Economic Outlook estimated that the global economy contracted by 4.2% in 2020.

Africa registered a slightly lower contraction of about 3%. However, this is still the Continent’s worst performance since 2000. GDP decreased in 41 African countries, compared to 11 countries when the global financial crisis hit the continent in 2009.

Despite these important challenges, the COVID-19 crisis has also revealed new opportunities and capabilities for Africa’s digital transformation. The digital agility of Africa’s private and public actors has been evident during this time.

For example, education Ministries in over 27 African countries established e-learning platforms for students affected by school closures. Person-to-person mobile money transfers in Rwanda increased four-fold during the first month of the lockdown. And the African Union Commission is harnessing over 15 initiatives to accelerate Africa’s digital transformation, with the backing of the African Continental Free Trade area.

The topic of this report – digital transformation for quality jobs – is therefore very timely.

While these examples illustrate the extent to which digital-savvy African entrepreneurs are devising responses to the continent’s new needs, more must be done to fully harness the digital transformation’s potential.

The report highlights two key priorities.

First, the need to make the most of digital technologies to trigger large-scale job creation. It is estimated that 29 million African youths will reach working age every year between now and 2030. Moreover, the 77 million Africans aged 15-29 with upper secondary or tertiary education in 2020 will rise to 165 million by 2040. However, today, telecom companies in 43 African countries employ only 270,000 full-time workers.

Public policies must bring digital solutions to the non-digital economy: agriculture, education, health, commerce, finance. Creating a facilitative environment for indirect job creation – in addition to direct job creation – in the digital sector, will require strong development strategies and a range of public policies. This includes, ensuring equal access and use of digital technologies, preparing Africa’s workforce for the digital era, and supporting digital adoption among small and medium enterprises.

Second, the need to strengthen international co-operation to turn digitalisation into a source of inclusion. It requires the commitment of all stakeholders, private and public, as well as the continent’s partners. One pressing issue is to reform the international tax system. This means tackling the tax challenges arising from the economy’s digitalisation, restoring stability in the international tax framework, and avoiding the risk of further uncoordinated, unilateral tax measures.

The COVID-19 crisis has exacerbated these challenges further by accelerating the digitalisation of the economy, increasing pressures on public finances and decreasing public tolerance for profitable MNEs not paying their fair share of taxes.

The 137 members of the G20/OECD BEPS Inclusive Framework – including many African countries – have developed a sound and solid basis for a future agreement, which we hope to reach soon.

It is now vital for African governments to continue to contribute in this exercise and shape a new global tax architecture that will help the continent achieve its sustainable development objectives. You can trust the OECD to continue to facilitate engagement on tax matters, including through the Africa Initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Distinguished guests,

With better policies, digital transformation can drive a more innovative, inclusive and sustainable recovery. The OECD stands ready to deepen the current policy dialogue on digitalisation in the several areas discussed in this report.

Together, the African Union Commission and the OECD, through its Development Centre, are committed to make the digital transformation a vector for human progress and contribute to achieving the African Union’s “Agenda 2063”.

Thank you.

 

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