VIDEOS
Fred Olayele and Yiagadeesen Samy
The importance of effective resource mobilization strategies to achieve the Sustainable Development Goals (SDGs), more than six years into Agenda 2030, lies at the heart of contemporary African economic development narratives. Clearly, the economic fallout from the pandemic is further widening financing gaps on the continent, thereby limiting the ability of traditional development financing sources to achieve the 2030 Agenda for Sustainable Development. With both domestic and external financing drying up in the face of the pandemic and its aftermath, existing unmet financing needs for the SDGs on the continent will be further exacerbated. Given high debt levels and limited fiscal space in several African countries, financing needs must be aligned with available pools of domestic and external capital. Read more.
Jean-Paul Adam
Chapter 12 by Jean-Paul Adam and Fred Olayele considers Africa’s blue economy – which includes sectors related to water-related resources such as fisheries and maritime transport and other domains such as tourism, energy production and agriculture – as both an approach that implies the sustainable utilization of ocean resources in the development of the ocean economy and a development finance opportunity. The chapter reviews key policy documents that form the basis of Africa’s integrated blue economy policy framework. It considers financing options and blue economy sectors where intervention is required. The authors then examine the case of Seychelles, a leader in prioritizing the preservation of its natural assets. Seychelles was the first country to launch a sovereign “Blue Bond” in 2018 in addition to negotiating a debt-swap deal with the Paris Club in 2015 in exchange for the government’s commitment to additional marine conservation and climate adaptation efforts. Arguing that the blue economy offers a sustainable pathway for Africa to build a more sustainable economy, the chapter concludes with a call for innovative financing that can create the conditions under which this can happen. Read more.
Marit Y. Kitaw
Chapter 2 by Marit Y. Kitaw and John Robert Sloan argues that the global green transition is an opportunity for mineral-rich African countries to turn things around and leverage their endowments of green minerals such as cobalt, copper, lithium, graphite, manganese and nickel that are inputs to lithium-ion batteries (LIBs) for use in electric vehicles (EVs). Drawing on examples from selected African countries, the chapter argues that joint ventures with key battery firms would enable a greater share of LIB value chains processes to be undertaken within Africa, and would be a win-win for African battery producers, innovators and entrepreneurs. Countries such as the Democratic Republic of the Congo, South Africa, Mozambique and Zimbabwe already dominate the production of minerals/metals used in LIBs. However, they tend to concentrate on extraction and initial-stage processing and have not yet moved into downstream beneficiation and manufacturing; nor have they exploited upstream and lateral linkages across their economies so that most of the value addition is happening elsewhere outside the continent. The AfCFTA could help build continental demand but on the supply side it would also require that African countries invest in the development of skills, competencies, infrastructure and technology. The chapter recommends the establishment of an African battery alliance for Africa’s sustainable and transformative future. Read more.
Akolisa Ufodike
In Chapter 4, Akolisa Ufodike and Susanna Ally focus on women entrepreneurs and their participation in the economy in the context of a more inclusive and effective financial system. T this allows them to identify the challenges in achieving gender equality and women’s empowerment. To conduct their analysis, they draw from three empirical studies that focused specifically on the challenges faced by African women entrepreneurs during the pandemic and its related restrictions. Two of the studies were from Ghana (on women business owners in eastern Ghana, and on disbursement of microcredit) and the third was on women entrepreneurs in northwestern Nigeria. They complement these studies by examining evidence from the relevant broader literature on women empowerment. The chapter provides an overview of the various barriers that women entrepreneurs face such as lack of access to start-up capital, collateral requirements and high interest rates, financial bias from banks and society’s cultural perceptions towards women. According to the authors, these barriers are even more challenging due to poor infrastructure and an insufficient policy and regulatory environment. After considering the benefits of empowering women, the chapter proposes a series of best practices for empowering women entrepreneurs and African women in general. Read more.
Titi Olayele
Chapter 5 by Titi Olayele argues that, given Africa’s demographics, skills acquisition and self-employment are crucial for addressing the saturated white-collar job market and youth unemployment. Focusing on Technical and Vocational Education and Training (TVET), the author remarks that it is considered as inferior to academic education in Africa (as in other parts of the world), and that its status is further diminished by low funding from governments. Olayele argues that the millions of children that do not attend school, and even those that do, are not acquiring basic skills that will be necessary for them to succeed in their professional lives. Her chapter thus addresses misconceptions and misunderstandings about TVET, and how TVET can be redesigned to help achieve the SDGs by promoting skills acquisition in Africa. Skills acquisition is explored, including interventions that target soft skills training and innovation, entrepreneurship, and more engagement from the private sector. Beyond skills acquisition, the author argues that the current TVET curriculum should be redesigned to provide opportunities for learning on and off the job that will support career development in an increasingly dynamic labor market. Read more.
John Sloan
Chapter 2 by Marit Y. Kitaw and John Robert Sloan argues that the global green transition is an opportunity for mineral-rich African countries to turn things around and leverage their endowments of green minerals such as cobalt, copper, lithium, graphite, manganese and nickel that are inputs to lithium-ion batteries (LIBs) for use in electric vehicles (EVs). Drawing on examples from selected African countries, the chapter argues that joint ventures with key battery firms would enable a greater share of LIB value chains processes to be undertaken within Africa, and would be a win-win for African battery producers, innovators and entrepreneurs. Countries such as the Democratic Republic of the Congo, South Africa, Mozambique and Zimbabwe already dominate the production of minerals/metals used in LIBs. However, they tend to concentrate on extraction and initial-stage processing and have not yet moved into downstream beneficiation and manufacturing; nor have they exploited upstream and lateral linkages across their economies so that most of the value addition is happening elsewhere outside the continent. The AfCFTA could help build continental demand but on the supply side it would also require that African countries invest in the development of skills, competencies, infrastructure and technology. The chapter recommends the establishment of an African battery alliance for Africa’s sustainable and transformative future. Read more.
Andrew Nevin, Adunola Omo, and Omomia Omosomi
Lack of economic diversification and low levels of manufacturing are seen as major constraints in many African countries, when compared to successful cases of industrialization and development such as in East Asia. In Chapter 6, Andrew S. Nevin, Adunola Bello, and Omomia Omosomi use the case of Nigeria to argue that both economic diversification away from oil and the need to focus on manufacturing – starting with low-end manufacturing and gradually moving to higher value-added goods – are ‘misconceptions’. Specifically, they argue that oil is not a big share of Nigeria’s economy, which has already been diversifying; oil’s share of public revenue is large because the latter is too small as a result of low taxation. It is also argued that there also too many factors that work against having a competitive manufacturing sector such as poor infrastructure and a poor enabling economic environment. Highlighting the significant amount of remittances already flowing into the Nigerian economy and the success of the Nigerian diaspora, the authors propose a Brain Capital strategy that focuses on service exports and that may not necessarily require Nigerians leaving the country. The chapter provides concrete examples of sectors/activities that would be involved in this strategy and concludes with recommendations about where key investments are needed, including the role of the private sector, in maximizing the benefits of Nigeria’s human capital. Read more.
Mahamadou Nassirou Ba
The importance of agriculture in the African context, whether in terms of its current and potential contributions to livelihoods, including the role of women and food security, and output at the macro level, cannot be taken for granted, especially when we consider the demographics of the continent. Yet, despite more attention paid to the sector and noted improvements, the sector continues to face various challenges (such as farming systems, access to land and property rights, access to inputs and finance) that impact productivity. While earlier chapters focused on the role of the manufacturing and service sectors, Chapter 13 by Mahamadou Nassirou Ba explores and proposes concrete recommendations on relevant policies and programs necessary for effectively harnessing the agricultural value chains for development. According to the author, significant efforts are needed to modernize the sector and shift the focus from subsistence farming to an integrated market approach to farming that includes agribusiness, agro-industries and increased application of science and technology. The chapter argues that the AfCFTA can be a catalyst for creating regional value chains in agricultural commodities, which should be fully integrated across agriculture, industry and services, and that will necessitate investments in climate smart agriculture. Read more.
Fergus T. Maclaren
Fergus T. Maclaren examines Africa’s tourism industry in Chapter 11. Although it had been growing rapidly until recently, as expected the pandemic negatively impacted the sector in most countries, with drastic consequences for the countries such as Mauritius and Seychelles that are heavily dependent on it. Maclaren examines African tourism development before the pandemic. He then considers how recent initiatives by the United Nations World Tourism Organization’s (UNTWO) can make the sector more resilient and sustainable, as well as related opportunities for, and risks of, implementation. The chapter includes a discussion of African tourism as it relates to the SDGs and how climate change variability is affecting the sector. Maclaren concludes that African countries have an opportunity to present themselves as new and different destinations, given their unique natural and cultural heritage that remain relatively unknown by much of the world, and within the continent itself. However, the recovery of the sector and its long-term sustainability will depend on how challenges related to climate change are addressed. Read more.
Joseph Potvin
In Chapter 9 by Craig Atkinson and Joseph Potvin, the authors describe a computational approach for simple, scalable and fast implementation of trade policy in the context of the AfCFTA rules. They suggest an approach that can improve trade governance and resource mobilization by diverse actors. The chapter begins by identifying various constraints to intra-African trade such as the patchwork of rules resulting from Regional Economic Communities (RECs), administrative hurdles to cross-border e-commerce, the existence of multiple ‘digital divides’ and the impact of complex health and safety management regulations, such as what arose throughout 2020-2022. To overcome these constraints and assist with the implementation of the AfCFTA, they outline the relevance of the recently launched “Data With Direction Specification” (DWDS) to facilitate the discovery and transmission of information about rules among all types of rule-makers and rule-takers. The resulting ‘Internet of Rules’ (IoR) is intended to ensure access and enable computer-assisted rules-based coordination for human-centred algorithmic governance. This proposal is particularly relevant for the concept of “Trade Policy 3.0” discussed by the authors, whereby digitally executable versions of commercial regulations are published on the Internet in a platform-agnostic open standard format. Read more.
Samuel Ojo Oloruntoba
Yiagadeesen Samy and Samuel Ojo Oloruntoba revisit the deindustrialization debate in Africa in Chapter 10, examining the causes of deindustrialization and the extent to which it has happened. The authors explain, based on a review of existing studies and their own assessment using most recent data, that while long-term deindustrialization has happened overall, and in several countries, the situation has also improved in recent years. At the continental and sub-Saharan levels, the shift from agriculture has been into the service sector instead of manufacturing, with the important caveat that it is difficult to know how big the informal manufacturing sector is and thus how much it could distort the picture. However, they argue that it is important to consider what is happening at both the regional and country-specific levels; this provides a clearer picture of cases of industrialization and deindustrialization. On the other hand, even if deindustrialization may not be as pronounced, it is their view that Africa’s manufacturing and industrial performance has been rather weak. The chapter also explores the relationship between deindustrialization and inequality. After considering the prospects for industrialization, in particular the potential of the AfCFTA, the role of the state in the process of industrialization and Africa’s participation in global value chains, it concludes with the implications of industrialization for domestic resource mobilisation. Read more.
Bartholomew Armah
Chapter 8 by Bartholomew Armah examines Africa’s debt vulnerabilities, which the author attributes to a combination of weak domestic resource mobilization, higher commercial debt contracted at premium rates, and the fact that debt has not led to inclusive growth, structural transformation and fiscal sustainability. These problems, according to the author, preceded the COVID-19 pandemic but were made worse by it. The chapter provides an overview of Africa’s fiscal landscape before the pandemic and a discussion of emerging trends since the onset of the pandemic. It also examines the asymmetric responses by advanced and developing countries, as well as global responses – for example by the G20, but also bilateral, regional and multilateral initiatives – to address Africa’s financing needs. The chapter argues that current levels of bilateral and multilateral financing are insufficient to address Africa’s financing needs. It concludes with a series of measures tailored to country-specific vulnerabilities – such as crowding in private finance, blending private and public financing, improved domestic resource mobilization and domestic policy reforms – to enhance development financing for both low-income and vulnerable middle-income African countries. Read more.
Craig Atkinson
In Chapter 9 by Craig Atkinson and Joseph Potvin, the authors describe a computational approach for simple, scalable and fast implementation of trade policy in the context of the AfCFTA rules. They suggest an approach that can improve trade governance and resource mobilization by diverse actors. The chapter begins by identifying various constraints to intra-African trade such as the patchwork of rules resulting from Regional Economic Communities (RECs), administrative hurdles to cross-border e-commerce, the existence of multiple ‘digital divides’ and the impact of complex health and safety management regulations, such as what arose throughout 2020-2022. To overcome these constraints and assist with the implementation of the AfCFTA, they outline the relevance of the recently launched “Data With Direction Specification” (DWDS) to facilitate the discovery and transmission of information about rules among all types of rule-makers and rule-takers. The resulting ‘Internet of Rules’ (IoR) is intended to ensure access and enable computer-assisted rules-based coordination for human-centred algorithmic governance. This proposal is particularly relevant for the concept of “Trade Policy 3.0” discussed by the authors, whereby digitally executable versions of commercial regulations are published on the Internet in a platform-agnostic open standard format. Read more.
Susanna Ally
In Chapter 4, Akolisa Ufodike and Susanna Ally focus on women entrepreneurs and their participation in the economy in the context of a more inclusive and effective financial system. T this allows them to identify the challenges in achieving gender equality and women’s empowerment. To conduct their analysis, they draw from three empirical studies that focused specifically on the challenges faced by African women entrepreneurs during the pandemic and its related restrictions. Two of the studies were from Ghana (on women business owners in eastern Ghana, and on disbursement of microcredit) and the third was on women entrepreneurs in northwestern Nigeria. They complement these studies by examining evidence from the relevant broader literature on women empowerment. The chapter provides an overview of the various barriers that women entrepreneurs face such as lack of access to start-up capital, collateral requirements and high interest rates, financial bias from banks and society’s cultural perceptions towards women. According to the authors, these barriers are even more challenging due to poor infrastructure and an insufficient policy and regulatory environment. After considering the benefits of empowering women, the chapter proposes a series of best practices for empowering women entrepreneurs and African women in general. Read more.
David Oludotun Fasanya
In the last few years before COVID-19, FDI flows to Africa had already begun to slow down as a result of the fall in commodity prices. There were also signs that FDI was diversifying away from raw materials to manufacturing and services. In Chapter 7, David Fasanya asks how FDI flows to Africa can be repurposed towards key sectors in a post-pandemic recovery; more investment is of course welcome but where it happens also matters. Fasanya reviews trends in FDI in the last 20 years, the motivations behind them, noting an increasing interest on the part of emerging economies such as China, Brazil and India to invest on the continent, and also an increase in intra-African FDI. He also argues that the growth effects of FDI would be more significant if certain areas are prioritized. These include openness to trade, market size, human capital, the green economy, biopharma industrial cluster, ICT and private-public partnerships, and are discussed in detail in the chapter. Read more.
Matthew Gouett
Chapter 3 by Matt Gouett examines the issue of sovereign wealth funds (SWFs), which are government savings vehicles – basically ‘current’ savings for ‘future’ expenditures – that can be deployed in times of crisis, such as the current pandemic. While the growth of SWFs had been led by fuel-exporting countries with current account surpluses and excess international reserves, the role of fuel exports and higher-than-average GDP growth seem to be more relevant today rather than current account levels or international reserves. The chapter analyzes the creation of the Nigeria and Ghana SWFs and argues that these were the result of external factors rather than strong domestic interests. Using the contrasting example of Trinidad and Tobago, a smaller economy where the creation of the SWF was homegrown, the chapter makes the case that the lack of domestic support in the cases of Nigeria and Ghana meant that there was no continued political will to support and fund the SWFs after their initial capitalization. As a result, both countries were unable to use their SWFs to respond adequately to the COVID-19 crisis. Read more.
