BY UNCTAD

Introduction

Africa has experienced high and continuous economic growth in the past decade, prompting analysts to argue that the continent has reached a turning point in its development history and is poised to play a more significant role in the global economy in the twenty-first century. The average annual growth rate of real output increased from 1.8 per cent in the period 1980–1989 to 2.6 per cent in 1990–2000 and 5.3 per cent in the period 2000–2010. Furthermore, 12 countries had an average growth rate above the developing-country average of 6.1 per cent over the period 2000–2010, and two countries (Angola and Equatorial Guinea) had double-digit growth rates. Unlike in the 1980s and 1990s, Africa’s average growth rate since the turn of the millennium has also been higher than the average growth rate of the world economy (table 1).

The continent experienced a significant slowdown in growth due to the global financial and economic crisis of 2008/2009 (Osakwe, 2010). Nevertheless, its average growth rate in the post-crisis period (2008–2012) was about 2 percentage points higher than that of the world economy. Internal and external factors contributed to Africa’s relatively impressive growth performance over the past decade. Better macroeconomic management, high domestic demand and a relatively more stable political environment are some of the internal factors that supported growth in the continent. On the external front, favourable commodity prices, stronger economic cooperation with emerging economies, higher official development assistance since 2000, and an increase in foreign direct investment (FDI) flows contributed to the growth process.

Despite Africa’s relatively strong economic growth performance over the past decade, many countries in the continent are grappling with several development challenges ranging from food insecurity, high unemployment, poverty and inequality, to commodity dependence, lack of economic transformation, environmental degradation, and low integration of the continent in the global economy. Since the dawn of the new millennium, African Governments and the international community have adopted various initiatives aimed at addressing these development challenges and improving living conditions on the continent. At the continental level, African Heads of State and Government adopted the New Partnership for Africa’s Development (NEPAD), which emphasizes African ownership of the development process and outcome, and calls for interventions in the following priority areas: agriculture and food security, regional integration and infrastructure, climate change and environment, human development, economic governance, and capacity development and women empowerment. At the international level, world leaders adopted the Millennium Development Goals (MDGs) which called for, among others, a halving of the proportion of people living in poverty by 2015. There are also ongoing efforts by the international community to delineate and finalize the broad contours of the post-2015 development agenda, within the framework of sustainable development.

While Africa has made some progress in achieving the goals set out in existing development frameworks, overall the continent is yet to realize the broad vision set out in these initiatives. For example, out of the eight MDGs, the continent is on track to achieve only three goals by the 2015 deadline, namely: achieving universal primary education (MDG 2), promoting gender equality and empowering women (MDG 3), and combating HIV/AIDS, tuberculosis and other diseases (MDG 6). Furthermore, the continent is still grappling with the problem of extreme hunger and poverty, and unemployment and inequality have increased over the past decade (United Nations Economic Commission for Africa (ECA) et al., 2013). These findings, based on analysis of macroeconomic data, have also been corroborated by the results of recent surveys. For example, a survey by Afrobarometer conducted in 34 African countries between October 2011 and June 2013 indicates that poverty rates in sub-Saharan Africa have gone down but that the number of people in poverty has increased despite a decade of relatively high growth. Reversing this trend is a challenge that African policymakers have to address effectively in the short to medium term to enhance the likelihood of achieving the African Union’s vision of an integrated, prosperous and peaceful Africa.

Read more: Catalyzing investment for transformative growth in Africa