Why 2015 is crucial year for Africa economic development

President Uhuru Kenyatta and US Secretary of State John Kerry lead talks between Kenyan and US delegations at State House, Nairobi on May 4, 2015. PHOTO | PSCU 

By MICHAEL PIKE

In Summary

• This year’s agenda is to take advantage of this steady economic growth and focus on structural transformations that lead to jobs which are more productive than informal agriculture.

As far planning goes, 2015 is a crucial year for Africa’s economic development.

Summits in Nairobi, Addis Ababa, Paris and New York will facilitate international cooperation, with Africa and its partners playing critical roles in shaping the continent’s economic future.

In September, at the United Nations General Assembly, global leaders are presumed to sanction Sustainable Development Goals (SDGs) to replace the Millennium Development Goals (MDGs). Africa is at the forefront of these modifications and has been pivotal in shaping the new SDGs.

Moreover, this year’s financial projections are even higher than the 2000 forecasts. African economies grew steadily by 6 per cents in 2013, rivalling East Asia, according to the African Progress Panel.

This growth is fuelled by Africa’s natural resources, dynamic services sector, increasing investments, expansion of exports, and improved agricultural production. 

However, Africa’s nascent economic growth has not generated enough well-paid occupations. UNDP states that over the past decade, Africa’s labour force grew by 91 million, but only 37 million of these people participated in jobs in wage-paying sectors.

Growth

This year’s agenda is to take advantage of this steady economic growth and focus on structural transformations that lead to jobs which are more productive than informal agriculture.

Africa’s recent growth is heavily powered by the development of a vibrant services sector, mostly in telecommunications, retail, transportation and tourism, which provided 62 per cent of Africa’s cumulative GDP growth between 1995 and 2011, according to the World Bank.

This shift has stimulated demand for a new kind of expertise. Companies in the information, communications and technology sector – such as Google, Microsoft, and Huawei – have already begun to implement educational programmes.

Naturally, the need to fill leadership positions within these advancing industries is also vital, and is a focal point in creating sustainable corporations throughout the continent.

Ghana, once seen as an example of economic stability in the region, has again sought financial aid from IMF to strengthen its currency.

South Africa has proven to be a thriving assembly hub for the automotive industry, and has also found some success in becoming a global automotive product supplier.

Moreover, South Africa’s retail sector and financial services industry are the most developed on the entire continent, and both have a dynamic regional presence.

Mr Pike is the managing director of Sub-Saharan Africa region at Pedersen & Partners