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NEW YORK – THE AFRICA FORUM 2019 – Commonwealth Africa Iniative

“A Peaceful and Prosperous Africa

Speech: Victor Harrison, Commissioner of Economic Affairs for the African Union

Note: Dr. Victor Harrison was the then Commissioner of Economic Affairs for the African Union (AU). He was one of the eight commissioners which make up the AU Executive Council. He was elected to the position in July 2017 for a four-year term. Prior to his election in 2017, he held a number of political positions related to business in his native Madagascar and also worked as a professor. The speech has been slightly editted for readability.

Ladies and Gentlemen!

With a current population of 1.2 billion and an estimate of the continent’s middle class reaching 1.1 billion people in 2060, the African market is the market of the future.

The African continent has experienced strong growth since 2000, leading to a “rising Africa” narrative. Africa’s economy grew 4.7 percent, between 2000 and 2017, making it the world’s second fastest growing region.

However, recent growth remains volatile and has not translated into higher well-being. In Africa, gross domestic product (GDP) per capita is less correlated with well-being indicators, such as quality of education, health status and housing conditions, than is the world average. The rate of decline in extreme poverty has been slow in Africa, (declining a mere 15 percent during the period 1990 – 2013).

Moreover, the continental trend is one of resilient but jobless growth with slight reduction in inequality. Of the 12 million young people joining Africa’s workforce each year, only 4 million find formal employment, according to 2018 data from Africa Development Bank, and approximately 60 percent of jobs in Africa are considered vulnerable. The lack of job growth has retarded poverty reduction. In addition, only 19 per cent of African population is covered by social insurance and less than 1 percent of unemployed people receive unemployment benefits insurance (AU, ECA, AfDB, UNDP, 2017).

Immense potential

Last year the African Union Commission, in collaboration with the OECD, published an economic report titled “Africa’s Development Dynamics.” The theme of this work was Growth, Jobs and Inequalities.  That publication contains a number of important figures reflecting the immense potential of Africa. The continent has more than 60 percent of the world’s fertile and unused land, 40 percent of the world’s gold, (85 to 95 percent of chromium and platinum group metals and 85 percent of phosphate reserves). Despite this potential, manufactured goods accounted for only 18 percent of Africa’s exports and Africa’s share of global manufacturing exports remains under 1 percent, while 62 percent of all imports were manufactured products from 2010 to 2015.

The starting point is for Africa to exploit its comparative advantage in natural resources, minerals and agriculture in order to sustain its development and generate inclusive growth.

To ensure the realisation of its objectives and the attainment of the Pan African Vision of an integrated, prosperous and peaceful Africa, Agenda 2063 was developed as a strategic framework for Africa’s long term socio-economic and integrative transformation.

The transformation of African economies is one of the key levers for achieving the objectives of Agenda 2063. This transformation has to go through industrialisation for greater value-addition to natural resources, increasing agricultural productivity and encouraging agribusiness, developing infrastructure and energy as well as offering opportunities for production diversification.

One continent, one market

Equally as important, in 2018 the African Heads of State and Government signed an agreement that will launch the African Continental Free Trade Area (AfCFTA). The CFTA aims at creating “One African Market” and, therefore, contributing to the integration of African peoples and economies. As of March 2019, 18 African countries have ratified the proposed agreement and it seems well on pace to achieve the necessary 22 signatories.

By expanding intra African trade, this free trade area will generate jobs for Africa’s growing youth population. Africa is estimated to have 226 million youth in 2015, a figure projected to increase to 321 million by 2030.

However, such a project needs more support beyond just mere ratification. The project will require accompanying measures, including investment in education and training. While the various initiatives and frameworks are good moves in the right direction, young people should be empowered with the necessary tools, critical skills and relevant education as well as training to support the interventions in areas such as agribusiness, the green and blue economy and entrepreneurship.

In Africa, about 263 million children and youth are out of school including 142 million of upper secondary school age (UNESCO-UIS, 2016). 35 percent of female youth are not in employment, education, or training, compared with only 20 percent of men. Moreover, the

lack of employment opportunities causes extensive migration from the continent, as young people seek better lives and resources to provide for their families at home. The number of migrants from Africa increased by 2.7 percent each year from 2000 to 2015 (AfDB, 2018).

In 2015, 14 percent of migrants worldwide were born in Africa.  We understand that Africa’s youth and women need to be offered educational, employment and leadership opportunities that will allow them to unleash their potential and act as key actors for achieving the “Africa We Want” by 2063.

A role for all

It is absolutely crucial for the continent to enhance the role of the private sector as a leading strategic partner of African states in the move towards structural economic transformation in the present decade and beyond. Considering that powerful developmental role, the African Union under Agenda 2063 puts a particular emphasis in providing the right environment for private sector development and investments attraction within the continent, notably through the AfCFTA and its accompanying measures. The basic incentive for business in the African continent is that it offers huge opportunities. Private consumption is expected to rise to $2.5 trillion in twelve years’ time and ‘business to business’ consumption is expected to rise to $4.2 trillion by 2030. In addition, connecting Africa through infrastructure development opens opportunities in PPP infrastructure investments, construction and logistics, among others.

Agenda 2063 calls for greater collaboration and support for African led initiatives to ensure the achievement of the aspirations of African people. In this vein, I could not conclude without making a heartfelt appeal to all those of African descent outside the African continent, those that constitute the Diaspora, to structurally contribute to the growth of Africa. “Diaspora entrepreneurs”, for instance, can help to foster entrepreneurship in their countries of origin. Diaspora contributions go beyond financial investment; they also encompass knowledge and skill transfer, and improved access to international capital markets. The Continental Free Trade Agreement is just one part of the solutions to the challenges facing the African continent and building a Peaceful and Prosperous Africa.