WEF: Inclusive growth possible in Africa despite high inequalities, says AfDB
In spite of the high inequalities existing between countries in Africa, inclusive growth was still possible with cooperation and integration of trade, the Chief Economist, African Development Bank, AfDB, Mthuli Ncube, has said. Mr. Ncube, who was speaking during one of the private meetings marking the opening of the 24the World Economic Forum, WEF, on Africa, on Wednesday in Abuja, emphasized the need to synergize their potentials to drive the inclusive growth in the African economy.
The meeting hosted by KPMG Professional Services was targeted specifically at exploring the potentials of Africa’s leading economies. The topic of discussion was “Driving Competitiveness through Cooperation, Integration and Economic Growth”.
Participants called on African leaders to come up with policies and strategies to help redress the rising inequalities between regions in the continent. The panel of discussants included the Chairman, KPMG Global Africa Practice and Senior Partner KPMG Nigeria, Seyi Bickersteth; the Chief Economist, African Development Bank, Mthuli Ncube; and Acting Chief Executive Officer, Business Unity, South Africa, Cas Coovadia.
Mr. Ncube said despite the high level of inequalities among countries, the positive growth the region desires is achievable through a synergy of their potentials, to help reduce the poverty rate in the region. He said the average poverty rate in Nigeria, Congo Democratic Republic and some others is about 48 per cent and added that with huge transformation, this can be reduced to 15 per cent. Mr. Ncube said the informal sector of the country’s economy where the small businesses were high, should be encouraged to realize their potentials. Mr. Bickersteth held that for poverty to be reduced in the continent, there is the need to deepen intra-Africa trade, which currently stand at 12 per cent.
“Some of the countries in Africa are very poor, and if we need to have the kind of growth that we want in the continent, then we need to integrate trade,” he said.
“We need to reduce the heavy presence of people at the borders who are basically interested in themselves, rather than deepening trade.” He said efforts must be geared towards the improvement of the intra-African trade currently at 12 per cent presently.
For Africa to have a positive growth, it needs to integrate in order to reduce cost and time of doing business and movement.
Border checks, he said, have remained a major hindrance to free movement of goods in the region, while Energy issues were problems that should be tackled to help businesses that would create jobs and reduce inequality indicators. He said the adoption of the privatization of the Energy sector by the Nigerian government was a step in the right direction, stressing the critical importance of private sector participation to drive the sector. Private sector participation, he pointed out, would drive different market forces and also help tackle corruption.
“Our political leaders have to step down their egos and provide enabling environment for the private sector to play a major role,” he said
Also, the Acting CEO, Business Unity, South Africa, Cas Coovadia, said there was no reason for the three economies not to integrate. He said that the hosting of the WEF in Nigeria was an opportunity to see and learn from the experience of the largest economy in the region. African leaders should learn to copy initiatives that worked positively in individual economies and replicate them in their domains to bring positive economic growth to the people. He called for effective use of the large natural resources in the region, while intensifying the fight against corruption in most African countries should be enforced.
“We need efficient private sector participation, enhanced infrastructure development and ensure accountability. The opportunity for growth is there in Africa. Nigeria, in particular, has a huge business sector with investment opportunities. The people need to get together to see how to drive the economy of Africa to create jobs,” he said.
He called for an improved education sector that has the capacity to help create skills that would be required by the work force in the future.