For the first time in 25 years, Africa is experiencing an economic recession. The COVID-19 pandemic has pushed more than 40 million Africans back into extreme poverty, and thus eroded the development gains of recent decades. Although socio-economic progress has been constrained due to the COVID-19 pandemic, efforts to improve natural resource governance, curb illicit financial flows, ramp up low carbon and invest in climate resilient solutions are critical to improve livelihoods and foster sustainable development.
This is why UNDP and the Japan International Cooperation Agency (JICA) have co-organized a special AFRI CONVERSE session, with the theme “Repositioning Africa for a Decade of Shared Prosperity”. The session brought together a cross-section of high-level panellists who are aligned with the UNDP’s Strategic Offer for Africa. The next Tokyo International Conference for Africa’s Development (TICAD8) will take place in Tunisia in 2022.
Prior to the pandemic, the continent saw consistent economic growth, improved governance, increased investments in social and physical capital, and a reduction in violent conflict. By 2020, an estimate of 27 African countries were categorised as high- or middle-income, and the continent’s return on foreign direct investment was 11.4 per cent, which is well above the global average of 7.1 per cent.
“The global effects of the pandemic have had a devastating impact on the continent’s finances, productivity and trade,” stated Ahunna Eziakonwa, UN Assistant Secretary-General, UNDP’s Assistant Administrator and the Regional Bureau for Africa Director.
When emphasizing the impact of the pandemic on social safety nets, she highlighted the need for African countries to develop both contributory and non-contributory sustainable social protection systems. She also expounded in the importance of a development pathway that would both cushion the blow of domestic and external shocks and contribute to resilience building.
In her remarks, Ms Eziakonwa drew attention to the UNDP’s Renewed Strategic Offer for Africa, which focuses on six key impact areas: structural transformation, natural resource governance, affordable and sustainable energy, climate change, women and youth empowerment, and peace and security.
She further noted that while the continent’s abundant mineral, agricultural, maritime, and intellectual resources could help trigger and sustain a much-needed economic revival in Africa, around $90 billion is lost annually through illicit financial flows. “If we could recoup just a fraction of that amount , we would be in a position to enable the continent’s natural resources to fuel sustainable development and shared prosperity. Accountability frameworks can be strengthened by safeguarding the commons and citizen platforms, and by developing an African brain trust on natural resource governance.”
Ms Eziakonwa also emphasized the critical need for a just green transition across Africa, given the continent’s disproportionate vulnerability to climate change. “Without urgent action to build resilience”, she emphasized, “climate change and ecological decline will lead to increasing poverty and displacement on the road to 2030 and will serve as barriers to the recovery from COVID-19.”
Mr. Kato Ryuichi, vice-president of JICA, highlighted Japan’s contribution to the response to COVID-19 on the continent, noting the “Home Grown Solutions”, a joint initiative with AUDA-NEPAD (the African Union Development Agency) which aims to identify, support and scale-up start-up businesses and small-and-medium enterprises to offset the economic fallout from the pandemic.
“JICA has extensively supported piloting and the scale-up of home-grown solutions that emerged out of COVID-19 through the partnership with AUDA-NEPAD and a start-up acceleration programme called “NINJA (Next Innovation with Japan), where we see immense business opportunities, which are key for promoting Africa’s innovation and leapfrog,” said Mr. Kato.
He also pointed to the success of two JICA-backed social development projects that had made great strides even amid the pandemic, which provide solid foundation for Africa’s development to build forward better toward the Post Covid-19.
The first was the Schools for All project, which began in 2004 at 23 primary schools in Niger and has now expanded to approximately 53,000 primary and secondary schools in eight African countries. The second is SHEP approach (Smallholder Horticulture Empowerment and Promotion) which, after much success in Kenya and Rwanda, is now being adopted by 26 African countries.
In addition, he introduced JICA’s approach towards TICAD8 and the post/with COVID-19 period, and emphasized that TICAD8 is expected to be an important milestone for Africa to be a resilient, inclusive and prosperous continent.
According to Susumu Tsubaki, the Director and CEO of Asia Africa Investment and Consulting (AAIC), investments in “leapfrogging” innovation have shown promise in Africa. In Africa, AAIC has thrown its weight behind large practical fields such as fin-tech (mobile payments, micro-insurance), health-tech (AI diagnosis / reading, telemedicine), mobility-tech (drone logistics, Uber logistics) and is seeing significant returns on its investments.
Tsubaki added that the sheer number of innovative homegrown solutions produced by Africa make the continent a sensible investment destination, and that external partners can help position the continent for a decade of prosperity. One such example is Kenya’s geothermal capabilities, which he noted may be of particular interest to foreign investors. He stated that “Kenya has seen a rapid increase in geothermal power generation since 2000, and this can be exported to countries such as Singapore, whose energy demand has experienced rapid growth.”
Mr. Ed Brown, Senior Director of Research and Policy Engagements at the African Center for Economic Transformation, shared that transformation is the key to Africa’s future. He believes that African economies must transform to be resilient due to slow-moving resources and a lack of jobs in the manufacturing sector. Brown accounted for the weak external competitiveness by citing low technology and deficient productivity. He explained African economies must transform to be resilient as resources were not moving fast enough to create jobs in the manufacturing sector and that external competitiveness is beset by low technology and weak productivity.
“African countries are not where they should be, given their abundant resources, energised populations and eager workforces. There must be a focus on a policy agenda that makes immediate changes that improve people’s lives,” Brown revealed.
He stressed that the COVID-19 pandemic had heightened Africa’s acceleration of its economic transformation. While there are numerous ways for countries to speed up transformation, ACET recommends the following policies for fast-tracking transformation:
Strengthening resource mobilisation and management.
Speeding up Africa’s digitalisation.
Building Africa’s capacity for policy making.
Brown emphasised the need to shift external partners’ support to encompass a more regional engagement, thus amplifying the impact of intervention beyond national borders.
Raymond Gilpin, the Chief Economist and Head of Strategy, Analysis and Research at UNDP Africa, affirmed that the Africa Continental Free Trade Area (AfCFTA) is a potential gamechanger for Africa. However, he added that ongoing legacy trading patterns continue to hamper small African businesses from scaling-up.
“One thing to do differently is to unpack some of the potential benefits of going to scale, such as having trade complementarity amongst African countries. For example, the chocolates produced in Ghana could be sold easily in Kenyan markets, while tourism opportunities in Cape Verde could be enjoyed by South Africans” remarked Gilpin.
To support regional integration and trade, UNDP’s Eziakonwa recommended that measures be put in place to support the promotion of the AfCFTA Secretariat as a conduit for increased regional trade and the integration of local firms. “Support can be provided with proactive trade facilitation and by partnering with the private sector. Cross border trade and economic links can help to increase stability and sustain economies through viable markets in local products and economic opportunities for local producers,” shared Eziakonwa.
To accelerate economic transformation and reposition Africa for a decade of shared prosperity, panellists agreed that there is a need for a new policy agenda. Panellists recognized that the TICAD Summit in Tunisia would provide an important platform for international partners to work closely with their African counterparts to ensure that this new policy agenda would assist in accelerating the achievement of the United Nations Sustainable Development Goals and the AU’s Agenda 2063, and foster post-pandemic economic recovery
TICAD8 could be an important milestone as Africa builds forward better, after the COVID-19 pandemic.
YouTube: AFRI CONVERSE 2021#6 Positioning Africa for A Decade of Shared Prosperity: Toward 2030/2063