From Shocks to Success: Building Africa’s Resilient Economy
By Patience Ikpeme
Africa has weathered a storm of global shocks, from the COVID-19 pandemic to the Russia-Ukraine war. Emerging from this volatility, the United Nations Economic Commission for Africa (ECA) has offered a roadmap for African countries to build resilience, ignite inclusive growth, and forge a new era of shared prosperity in its 2023 Economic Report on Africa.
The report presented in Abuja recently by Adam Elhiraika, Director of the Macroeconomic and Governance Division at UNECA highlighted the urgent need for a reimagined global cooperation framework that benefits Africa.
With many African nations teetering on the brink of debt distress, innovative debt resolution mechanisms are crucial he said. The report called for “Reallocating Special Drawing Rights” and developing a forward-looking debt-sustainability framework to ensure that responsible borrowing aligns with growth potential and future shocks.
The African Continental Free Trade Area (AfCFTA) the report stated holds immense potential for intra-Africa trade and economic integration. However, the ECA envisions even greater possibilities through regional value chains.
Collaborations in agricultural processing, light and medium manufacturing, and services driven by technological advancements Adam Elhiraika said could create millions of jobs, strengthen resilience, and accelerate industrialization.
The report added that financial integration offers another avenue for regional resilience. Establishing regional bond markets could mobilize savings, pool risks, and fund critical infrastructure projects across the continent. Additionally, regional agricultural commodity markets could reduce dependence on volatile global markets and stabilize food security.
Robust national development plans are also considered key to weathering future storms. The report emphasized incorporating risk-informed strategies into these plans, anticipating potential disruptions and formulating proactive responses. This proactive approach will ensure sustainable growth and macroeconomic stability even in the face of unforeseen challenges.
Sustainable growth hinges on structural transformation, and the ECA emphasizes the importance of smart industrial policies. Identifying optimal combinations of policy actions based on local conditions and global trends is critical. Additionally, addressing skill gaps, infrastructure deficiencies, and institutional quality the report noted are fundamental to fostering firm growth and competitiveness.
The report acknowledged the “new normal” of global crises and their lasting impact on African economies. To counter these shocks, it outlined strategies for mitigating and adapting to their effects. Building resilience into economic and social systems will enable the continent faster recovery and reduce the long-term consequences of future disruptions.
By embracing shared prosperity, fostering regional integration, and implementing smart industrial policies, African countries can navigate the complexities of the global landscape and build a resilient future for all.
The ECA’s report provides a valuable roadmap for policymakers, businesses, and individuals seeking to unlock Africa’s immense potential and ensure inclusive economic growth in the years to come.
