The African Development Bank launched their annual African Economic Outlook report on Thursday noting that Africa’s general economic performance continues to recover and GDP growth is projected to accelerate to 4.0% in 2019 and 4.1% in 2020.
However, the report adds that improved macroeconomic and employment outcomes require industry to lead growth.
The 2019 report focuses on three key areas - Africa’s macroeconomic performance and prospects; Jobs, growth, and firm dynamism and Integration for Africa’s economic prosperity.
The Bank’s Director of Macroeconomic Policy Forecasting and Research Department, Hanan Morsy, provided participants with the report’s “storyline” and noted that in spite of a rising national debt across Africa, “there is no systemic risk of debt crisis.”
At the current rate of labor force growth, Africa needs to create about 12 million new jobs every year to prevent unemployment from rising. The report states that a “concerted industrialization effort that builds on countries’ comparative advantage,” is required.
“Manufacturing-driven growth has the highest impact on job creation,” Morsy said.
At the core of African integration, the African Economic Outlook suggests that “a borderless Africa” is one of the key foundations of a competitive continental market that could serve as a global business center.”
The Continental Free Trade Agreement (CFTA), signed in March 2018 by 44 African countries, offers substantial gains for all African countries the report says, citing new data and analytics.
“To develop cross-border supply chains, improving customs management and adopting simple and transparent rules of origin, are essential,” the report notes.
The report identifies five key trade policy actions that could potentially bring Africa’s total gains to 4.5% of its GDP, or $134 billion a year:
- eliminating all applied bilateral tariffs in Africa;
- keeping rules of origin simple, ﬂexible, and transparent;
- removing all nontariff barriers on goods and services;
- implementing the World Trade Organization’s Trade Facilitation Agreement to reduce cross border time and transaction costs tied to nontariff measures and ;
- negotiating with other developing countries to reduce their tariffs and nontariff barriers, by 50%.
A full set of updated growth projections will be released in May 2019, ahead of the Bank’s Annual Meetings in Malabo, Equatorial Guinea.
The full report is available online in English, French, and Portuguese at: http://www.afdb.org/aeo