African countries need to grow their economies faster if they are to achieve the Sustainable Development Goals by the target date of 2030, the Economic Commission for Africa (ECA) says in its annual report.
The SDGs can be achieved by carrying out comprehensive macroeconomic reforms to build resilience, raise potential growth and improve inclusiveness, says the Economic Report on Africa (ERA), released in Marrakesh, Morocco.
To accelerate growth to double digits by 2030, Africa needs to boost investment from its current 25 per cent of GDP – much lower than the 32 per cent in East Asia and the Pacific – to 30–35 per cent, and substantially improve productivity,” according to the Report. “The domestic drivers include sustained investment in infrastructure and strong private consumption, along with higher oil production (from new fields) and favourable weather.”
The continent’s gross domestic product (GDP) is projected to rise to 3.4 per cent this year from 3.2 per cent in 2018 and to 3.7 per cent in 2020 on the back of rising private consumption, rising and sustained public investment, higher commodity prices, current oil exploration and production and favourable weather, it says.
“However, most African economies face downside risks to growth from the tightening of monetary policy and new protectionist policies in advanced economies; weather-related shocks, especially in agriculture-dependent economies; threats of terrorism and conflict; political instability and high chance of debt distress in some countries,” says the ERA.
The Report, in a section on recent economic and social developments, says Africa’s progress in poverty reduction remains steady, albeit slow, because poverty reduction has not kept up with population growth.
“So even as the poverty rate falls, the number of people in absolute poverty has remained around 390 million,” adding that women represent a proportionately higher percentage of the working poor as the gender gap in Africa is still tilted in favour of men.
On the proposed African Continental Free Trade Agreement (AfCFTA), the Report says the reforms it will create can help to reduce the negative effects of external shocks on African countries and also enhance trade performance as well as assist their integration into global value chains.