Africa needs bold economic reforms to ensure sustainable development – AEC

African leaders have been called upon to put in place bold economic reforms, aimed at sustaining growth and boosting human development on the continent.

Participants at the closing session of the seventh African Economic Conference (AEC), held in Kigali, Rwanda on November 2, 2012, agreed that good governance and fair competition will help Africa meet its sustainable development agenda, while carefully calibrated government support can help fulfill Africa’s economic potential, reducing political risks and bolstering financial accountability to open new markets.

The four-day conference highlighted the need for policy-makers to create diversified economies capable of generating employment, implementing better social policies and inclusive growth.

One other issue highlited at the conference was how to use natural resources to create economic benefits for ordinary citizens.

Hosting the AEC for the first time, Rwandan President, Paul Kagame said that in this era of economic uncertainty, the world has high expectations for the African continent, which has become the world’s second-fastest growing region.

According to the African Economic Outlook 2012, economic growth across the African continent is expected to rebound from 3.4% in 2011 and accelerate to 4.5% in 2012 and 4.8% in 2013.

“Some countries have even done better than these statistics depict. And because some countries from other continents show signs of economic stagnation, commentators have been inclined to think that this is Africa’s time,” Paul Kagame said.

However, current statistics show the continent’s poverty rates have remained stubbornly high, while progress on health, education and job creation have been too slow to accommodate its fast-growing population.

These challenges, it is believed, are likely to become more difficult to tackle in the current global economic environment.

Touching on how to surmount the challenges, Donald Kaberuka, President of the African Development Bank, said, “Rich countries are very much concentrated on their own immediate problems to fix,” adding, “As we can see from the trade and climate negotiations, there is limited appetite for the multilateral solutions, so we need to trade our way out of poverty and deal with the impact of climate change.”

Mthuli Ncube, Chief Economist and Vice President of the African Development Bank, said that “Africa can have a brighter future, and has the potential to become the next emerging market by the end of this decade if political, social protection, quality education, private sector and regional integration are implemented.”

Ncube urged every one “to see inclusive growth in action in Africa.” He also affirmed that the continent’s long-term growth prospects are strong, propelled by both external trends in the global economy and internal changes in the continent’s societies and economies.

According to him, investment in infrastructure will promote regional integration and trade, creating an environment that is more conducive to economic growth, the development of markets and paving the way for an acceleration in human development.

“Deliberate policy measures and targeted investments are needed to make growth not just fast, but also inclusive and sustainable,” said UNDP Administrator Helen Clark, who opened the conference along with Kaberuka on October 30. She added that “the rising tide is capable of lifting every boat.”

The discussants said African countries can raise money by negotiating international contracts from a position of strength, using proceeds from land and mineral deals to invest in rural infrastructure, diversify the economy and boost human capital.

“If politically the leadership is right, there is no doubt that leadership will focus on inclusion in almost everything it does,” said the former President of Nigeria, Olusegun Obasanjo.

The 2012 AEC meeting was also marked by an award for the best paper of the conference submitted by an African under the age of 40. Forty-three papers were shortlisted out of 500 submissions. Dick Nuwamanya Kamuganga’s paper, titled, “Does Intra-Africa Regional Trade Cooperation Enhance Export Survival?” met the selection criteria set out by the African Economic Research Consortium, in terms of methodology and policy relevance.

Organised each year by the Economic Commission for Africa (ECA), the African Development Bank (AfDB) and the United Nations Development Programme (UNDP), the conference brought together some 500 participants under the theme “Inclusive and Sustainable Development in an Age of Economic Uncertainty”.

By Edmund Smith-Asante

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