World Economic Forum on Africa: Delivering Africa’s Promise

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The 2013 World Economic Forum on Africa (WEF) that was held from May 8th to 10th in Cape Town, South Africa under the theme ‘Delivering Africa’s Promises’, attracted top African business leaders, heads of government and civil society activists. The forum that discussed on measures required to ensure how Africa’s rapid growth can stay on the course and start putting a significant dent into poverty.
The Forum, which serves as an important platform for regional and global leaders from business, government and civil society to deepen the continent’s integration agenda and renew commitment to a sustainable path of growth and development, was officially opened by paying tribute to the late Ethiopian Prime Minister, Meles Zenawi.
Discussions were held on a range of topics of which accelerating economic diversification was one. Africa’s fastest growing economies bear testament that both resource-rich economies and agricultural economies are driving growth across the continent. With rapidly rising consumer spending, those sectors which are not resource-intensive, such as retail, energy and telecommunications, are attracting a growing number of regional and global investors. When it comes to strategic Infrastructure, economic, social and soft infrastructure, gaps remain critical constraints to economic growth, regional integration and social development. Investments in strategic infrastructure are expected to increase the productivity of businesses operating in the region by 40 percent. Without adequate infrastructure endowment, Africa is at risk of sacrificing about 2 percent of GDP growth every year. The best evidence of this is the emergence of a priority list of 15 infrastructure projects (that are not disclosed), designed to catalyse regional integration, propel growth through private sector activity and join up African markets. Of these projects, two are to be piloted in the next six months.
The summit has set out where and how to start and the identified projects will focus on closing critical gaps: providing energy, water, roads and transport. Africa needs an estimated USD 93 billion a year for infrastructure financing and so far only USD 40 billion is spent annually, which leaves a funding gap of USD 53 billion.
To help bridge this gap, the African Development Bank (AfDB) is working on an infrastructure bond of up to USD 50 billion, which would take advantage of the pool of surplus funds available globally for investment.
THE African Development Bank (AfDB) has challenged African leaders to come up with their own mix of economic policies which can resolve the current economic woes instead of relying on those used and prescribed by others.
“There is no model economic policy. Africa should just come up with its own and stop trying to copy,” AfDB president Donald Kaberuka said. He added “Africa should come up with its own economic model instead of trying to copy from others.”
Unlocking Africa’s talent was another topic of discussion. As Africa is home to the world’s fastest growing youth population, the continent faces a demographic dividend if its human resources can be equipped with the capacity to manage and deliver growth effectively. With an estimated job demand of over 10 million annually, efforts to promote innovation and entrepreneurship also need to be intensified.
With an estimated annual growth of 5 percent in 2012-2013, sub Sahara Africa continues its transformative journey from a developing continent to the nucleus of global growth. According to the World Bank, almost half of Africa’s countries have achieved middle-income status. At the same time, the continent’s positive outlook is endangered by unstable commodity prices, rising inequality and youth unemployment.
It was stated at the forum that to build on its achievements, Africa’s leaders need to strengthen the continent’s competitiveness, foster inclusive growth and build resilience in a volatile global environment. Accelerating economic diversification, boosting strategic infrastructure and unlocking talent are critical success factors in this new leadership context.
Agriculture also came under the spotlight at the conference — Africa has nearly two-thirds of the world’s uncultivated arable land, but has to import more than USD 20 billion worth of food annually.
The Grow Africa partnership, a US and Swedish development aid-funded vehicle created at the last WEF summit in Addis Ababa, announced that it had mobilised USD 3 billion in agricultural investments.
A key factor in attracting such investments has been the development of agricultural infrastructure, which the partnership now partially funds through covering costs of project design and feasibility studies.
AfDB president Donald Kaberuka says the bank is contemplating a similar mechanism that would fund project preparation costs in order to lower risk for the private sector in the initial phases of other projects.
The over 1,000 delegates at the meeting, which was attended by 12 African heads of state, said that it felt different to previous World Economic Forum gatherings as leaders of the continent are more into integration and partnership.