Investment, Exports Increasingly Driving African Growth Performance: AEO

Addis Ababab ,February 7/2020(ENA) Investment and exports are increasingly driving African growth performance while its dynamics is mainly underpinned by domestic demand, the African Economic Outlook 2020 revealed.

According to the AEO, growth’s fundamentals have improved as its drivers are gradually shifting towards investment and the net export and away from private consumption.

Deliberating on the report findings, AUC Economic Affairs Commissioner Victor Harison said “it reminds us to the size of the investment that must be made in the development of human capital in Africa, an important component for achieving productive transformation.”

Africa has experienced sustained economic growth from 2000-2016, he said, adding that “however, this growth has not created enough descent jobs. In equalities persist and the provision of basic social services remains insufficient.”

“This disconnects between growth and development outcomes stems from the structure of Africa’s productive system” Harison underscored.

Diversification and productive transformation can help overcome dependency on importing primary product while creating sufficient production and absorb the close to 12 million youth by providing more employment opportunities, according to the Economic Affairs Commissioner.

Accelerating Africa’s development of its productive sector is essential, he said, adding that “to do this the continent needs to focus on developing business cluster of firms, facilitating regional production networks, and enhancing firms’ abilities.”

Speaking about the AfCFTA, Harison pointed out that African companies must be the main actors and beneficiaries of the free trade agreement.

The Commissioner stressed “the intrinsic link and the interdependence between peace, security and socio-economic development is no longer is to be demonstrated.”

It is to be recalled that the African Development Bank’s (AfDB) 2020 African Economic Outlook revealed Africa’s economic growth that remained stable in 2019 at 3.4 percent and is on course to pick up to 3.9 and 4.1 percent in 2020 and 2021 respectively.

Growth’s fundamentals are also improving, with a gradual shift from private consumption toward investment and exports, the report indicated.