The challenge: Rebooting Africa’s productive investment strategies
Even before the COVID-19 crisis stopped the continent’s economic growth in its tracks, Africa was facing a deficit in domestic and foreign productive investment. Levels were too low to either match the needs of a fast growing, increasingly urban, working-age population, or improve the insertion of the continent in the global economy: on the eve of the pandemic, decent jobs remained the exception, and labour productivity had declined to about half the Asian average.
As African governments refine their post-COVID recovery strategies, therefore, they are not only aiming at improving on pre-crisis levels, but also at stimulating more robust, inclusive and sustainable types of productive investment. Given the impact of the crisis on their fiscal space, however, such a reboot requires both innovative policies to mobilise and allocate resources more effectively, and better co-ordination amongst all African stakeholders and their international partners.
Our response: Fast-tracking policy innovation, facilitating dialogue
In order to accelerate those processes, the OECD Development Centre and the African Union Commission are opening a new space for dialogue, mutual learning and the exchange of best practices. It is designed to facilitate joint work by the Member States of the African Union, its Regional Economic Communities (RECs), other major stakeholders and their international partners.
The Platform convened for the first time on the occasion of the 20th International Economic Forum on Africa in February 2021, under the chairmanship of HE Mr Albert M. Muchanga, Commissioner for Economic Development, Trade, Industry and Mining of the African Union Commission, and HE Mr Manuel Escudero, Chair of the Governing Board of the OECD Development Centre and Permanent Representative of Spain to the OECD.
Watch days 1 + 2 of the meeting
Africa’s primary asset is its young population. The 375 million youth expected to reach working age by 2035 can be the driver of economic prosperity, if equipped with the right education, skills and jobs. Investing in human capital is thus crucial to both meeting labour market demands and providing people with economic opportunities to secure their livelihoods and well-being.
|The effective implementation of the Africa Continental Free Trade Agreement (AfCFTA) is essential to reducing dependence on world markets and strengthening participation in regional and global value chains (GVCs). The aim to triple the volume of intra-African trade from 17% to 52% by 2022 requires ambitious, co-ordinated policies to unleash the continent’s entrepreneurial potential and increasing the competitiveness of firms.
This work stream leverages the OECD Initiative for Policy Dialogue on GVCs, Production Transformation and Development and its Production Transformation Policy Reviews to help participants identify policy reforms that can foster productive transformation in Africa.
Key issues: strategic clusters of firms; regional production networks; local, regional and global value chains.
|Africa needs some USD 130-170 billion annually to bridge its infrastructure gap and generate sustainable growth at 5% per year or more. This is an immense opportunity for private investors, and yet their contribution remains notoriously low: African governments have been the largest promoters of infrastructure by far. The impact of the COVID-19 crisis on their revenue makes it indispensable to overhaul existing models. This work stream supports ongoing efforts on regional infrastructure connectivity, notably within the second phase of the Programme for Infrastructure Development in Africa (PIDA) 2021-2030.
Key issues: quality infrastructure; renewable energy; regional connectivity; physical and “soft” infrastructure.
Mandate to act
At their Fifth High-level Meeting (May 2019), members of the Governing Board of the OECD Development Centre reaffirmed the importance of good practices and resource mobilisation for quality infrastructure and social protection. They asked the Centre to leverage its partnership with the African Union Commission (AUC) and establish a structured policy dialogue amongst relevant partners and stakeholders.
Weeks later, the High-level Dialogue with Africa: Road to TICAD7 in Yokohama (July 2019) stressed the importance of an international policy dialogue on the financing of public policies and infrastructure development on the continent.
In that context, participants in the 19th edition of the International Economic Forum on Africa (November 2019) urged the Centre to support the AUC’s priorities for productive investment in Africa through a Platform on Investment and Productive Transformation. These included then AU Commissioner for Economic Affairs, ministers from AU Member States, incl. Ethiopia, Mali, Nigeria, Rwanda and Togo, as well as representatives from France, Japan, Korea, Spain, the European Union and China
Finally, in the aftermath of the COVID-19 crisis, the Platform was reconceptualised to support the recovery strategies of African Union members.
The OECD Development Centre and the African Union Commission have a longstanding partnership that aims to deepen international co-operation on the pan-African agenda of integration and transformation. Other projects in their joint portfolio include two annual reports, Africa’s Development Dynamics and Revenue Statistics in Africa, as well as the yearly International Economic Forum on Africa.
For more information, please contact DevEuropeMiddleEast&Africa@oecd.org