Article compiled by Africa Growth Renaissance
RECLAIMING THE AFRICAN DREAM. HOW TO ACHIEVE A $ 7 TRILLION GROSS DOMESTIC PRODUCT IN LESS THAN A DECADE.
As of 2022, the Gross Domestic Product (GDP) of Africa was estimated to be roughly around $ 3.1 trillion. Although there is a great possibility according to economic forecasts that, Africa will be the largest growing economy in the next 2 years, there is still excess capacity in many African countries. This should pose as an opportunity for unlocking value to steer economic growth and development.
POLICY PROPOSALS FOR UNLOCKING VALUE
1) Increase growth and dynamism in the agriculture sector:
Agriculture is the back borne of many African countries and they are endowed with fertile soil and climatic conditions for Agriculture. Moreover, agriculture produce is used in agro-processing factories, this will enable the continent to achieve food security and thwarting importation of food from abroad, hence reigning in budget deficits fuelled by enormous food importation bill by some African countries. Crops with great commercial viability include beans, wheat, maize, sorghum, millet, sugarcane, rice, sunflower, tobbacco, tea, coffee, and cocoa.
2) Continuously promote tourism.
The African continent has the potential to spur its growth through the tourism sector. According to the World Tourism Report, Africa’s tourism earnings are estimated to be $ 90 billion as of 2022. The continent has a great potential to achieve a $ 1 trillion dollar tourism sector in less than a decade. This can be achieved through improving the continent’s image and international relations with the rest of the world, as well as promoting intra-African tourism.
3) Formalise the informal, to boost growth and job creation.
The informal sector in Africa is the greatest contributor of economic activity in the continent but its revenue cannot be easily captured. There is need for supporting these small businesses so that they can become part of the mainstream economy also contributing job and taxation to the government. The government can assist these firms through training, access to finance and market as well as building infrastructure for them when necessary.
4) Improve policy transparency, accountability, to build trust by households to accumulate savings.
African government macroeconomic policies should be consistent, reliable, and prudent. This helps to boost confidence by many households hence resulting in accumulation of savings which can be channelled towards investments which can generate employment and economic growth. The monetary policy of the economy should pursue inflation targeting, favourable interest rates and prudent money supply. With regards to fiscal policy, government should spend but not compromising its fiscus space and should also maintain low tax rates which promotes consumption and investments. Reining in inflation and ensure macroeconomic stability boost confidence, investments, and hot money inflows into the country.
5) Boost sense of belonging in households through accountability and transparency in the provision of public goods.
One of the key roles of the government is to provide public goods, which include social overhead capital like roads, hospitals, schools, bridges, and dams. Efficient provision of these services can give people a sense of belonging hence boosting their confidence in the distributional role of the government, which lead to them contributing to taxation wilfully.
6) Promote international trade and strategic partnership for development.
Other than, engaging in intra-African trade only, African countries should also spearhead international trade with the rest of the world. As a result of this the continent can have a larger market to sell its wares hence securing jobs for its people and improving standards of living of the majority of people.
7) Decentralisation and Setting of SMART goals.
Decentralisation of power and authority can act as a catalyst for advancing economic development in an economy. The vision and goals to be achieved should be articulated from the top cascading to administrative units of governance which can be provinces, districts down to the smallest geographical units. The goals should be Specific, Measurable, Attainable, Realistic and Timebound (SMART).
8) Value addition and beneficiation, so as to create jobs.
The paradox of Africa is that it is highly resource bound and can even rank on top of the other continents, but its economic performance is disproportionate with its natural endowments. This is on the notions that, the continent suffers from NEGATIVE TERMS OF TRADE, as it exports cheap ram materials abroad. As a result, this is high time for the continent to add value to its products, hence creating jobs for its people.