New strategic directions of the ECA: Putting ideas into action for an empowered and transformed Africa
The year 2018 marks the sixtieth anniversary of the establishment of the Economic Commission for Africa (ECA). The occasion presents an opportunity to reflect on the contribution of ECA, as a key player on the African institutional landscape, to the task of tackling the continent’s development challenges.
This anniversary – a diamond jubilee – also offers an opportunity to take stock of the Commission’s achievements and chart its way forward to a position where it can respond to the priorities and aspirations of its member States.
The repositioning of ECA is being undertaken in response to changing global and regional dynamics, including the new macroeconomic environment in Africa, global and continental development frameworks and United Nations reforms. The proposed strategic directions and programmatic priorities laid out in the present note are the outcome of extensive consultations with a broad array of stakeholders.
The implementation of the proposals will go a long way towards enabling the Commission to move forward in its vision of serving its member States better by putting ideas into action for an empowered and transformed Africa.
Rationale for strategic repositioning of the Commission
A decade after the global financial and economic crisis, Africa finds itself in a new macroeconomic environment. Countries that were attracting huge volumes of foreign direct investments (FDI) are no longer doing so. Oil-rich African countries that benefited from rising oil prices have witnessed serious economic downturns. This macroeconomic environment is being further strained by shifts in the domestic policies of emerging economies such as China, which are rebalancing their sources of growth. African economic growth recovered in 2017 but the rate of growth is still far below the double-digit growth needed for structural transformation.
The current pattern and quality of growth in the region are leaving large segments of the population trapped in poverty and vulnerability. The deep and persistent inequalities across the continent have economic, social and political consequences. In the long run, these elements run the risk of undermining economic growth, productivity, and the development of markets, and of creating conditions for open conflict and social unrest, as the recent experience of some African countries, in particular those in North Africa, has shown with the Arab Spring. Increasingly, there is consensus regarding the urgent need to ensure that growth is sustainable and inclusive.
In order for Africa to grow and evolve, it is imperative that it transform structurally and diversify its economies. The current merchandise export structure, dominated by raw and unprocessed commodities, is not conducive to the envisaged level of development. African countries must diversify their sources of growth to reduce the vulnerability of their economies to internal and external shocks.
If Africa is to attain the desired outcomes of both the 2030 Agenda and Agenda 2063, a major change in the understanding, treatment and creation of a growth-enhancing macroeconomic environment is required. This change must look at the interface with development beyond the narrow focuses on stabilization and growth and be conceived in an integrated multisectoral perspective.
Africa must strengthen its own resources to tackle the macroeconomic issues that are undermining more inclusive and sustainable growth. The continent’s ability to deal with new and emerging challenges is predicated on its ability to stabilize and grow its economies, primarily by mobilizing its own resources. To meet this challenge, African Governments need to build robust governance systems to support effective public sector management, to mobilize domestic resources, to combat illicit financial flows and to reform tax policies.
If African countries are to thrive in the constantly changing and dynamic global environment, it is critical that they have a robust governance system in which the authority of the State is perceived as legitimate and there is predictability about how agents are expected to act. The presence of such a governance system would also make Africa an attractive continent in which people are happy to live, work and invest.
The private sector’s role in financing Africa’s development will continue to grow. The private sector can provide innovative and efficient ways of delivering infrastructure and other solutions for the continent. Most important, by mobilizing private sector finance, Africa can raise the trillions of dollars needed to fast-track its development, by diversifying the economy and improving competitiveness. This will require the development of robust capital markets and the creation of an environment conducive to private development, in particular in the areas of land, agriculture, energy and other infrastructure sectors. By leveraging the private sector, Africa can shift the production frontier for both goods and services, create sustainable economies, generate additional jobs and reap the continent’s demographic dividend.
Poverty and inequality, however measured, remain very high in most parts of the continent. Accelerating the pace of poverty reduction and narrowing the persistent inequalities across the continent will contribute to economic growth, higher levels of productivity and improved living standards. Increasingly, there is an urgent need to ensure that public policies in Africa are more inclusive and respond to the needs of young people and women.
The commitment of African Governments to the regional integration agenda through, among other measures, the creation of the African Continental Free Trade Area and the Action Plan for Boosting Intra-African Trade, is at a scale sufficient to attract the private sector. Complemented by other continental flagship programmes and strategies, including the Comprehensive Africa Agricultural Development Programme, the Programme for Infrastructure Development in Africa, the Action Plan for the Accelerated Industria l Development of Africa and the Science, Technology and Innovation Strategy for Africa provide critical frameworks to attract and leverage private sector investment, optimize economic production and close the productivity gaps in African economies.
Climate change, environment and natural resources management are critical leverage points for the continent for implementing the Sustainable Development Goals. Attainment of many of the Goals is directly or indirectly linked to the sustainable management of natural resources for healthy ecosystems, healthy economies and healthy societies. Africa is faced with serious challenges posed by climate change to the attainment of the 2030 Agenda for Sustainable Development. Africa must effectively integrate mitigation and adaptation to climate change into development policy planning processes. This is imperative to reduce vulnerability and strengthen resilience to impacts. Moving forward with the implementation of the intended nationally determined contributions under the Paris Agreement would enable Africa countries to reduce their future emissions and to contribute to global collective efforts to tackle effects of climate change. By harnessing natural resource endowments, new technologies and infrastructure as a means of creating wealth, reversing resource depletion for Africa’s development and as a conduit towards diversifying its economies, African countries also need to pursue policy reforms to foster a green economy while contributing to balanced integration of the economic, social and environmental dimensions of sustainable development.
Data and statistics are central to the development process. There is consensus on the development aspirations that should be pursued by Africa, as captured in the 2030 Agenda and Agenda 2063. In implementing and monitoring the two integrated agendas, there is need for an effective data policy regime and architecture to support the process. An African data revolution that constitutes the lifeblood of policymaking, planning and follow-up, and review of the two agendas will require resources and strengthened capacities for data collection, storage, access and analysis grounded in robust statistical systems.
Putting ideas into action for an empowered and transformed Africa
The vision of ECA is framed around delivering ideas and actions for an empowered, inclusive and transformed Africa and is informed by the 2030 Agenda for Sustainable Development and Agenda 2063 of the African Union. The three core facets of the Commission are its function as a think tank, its convening function and its operational function.
ECA’s overall objective is to support the continent to effectively confront one of its central challenges: jobs creation. With more than half the jobs on the continent in the informal sector, that challenge has particular significance in fiscal terms and in terms of levels of poverty.
To deliver on its vision, ECA will concentrate on five strategic directions:
Advancing the position of ECA as a premier knowledge institution that builds on its unique position and privilege to bring global solutions to the continent;
Building sustainable development solutions to accelerate Africa ’s economic diversification;
Creating innovative solutions to finance sustainable infrastructure, human, physical and social for a transforming Africa;
Contributing solutions to transboundary issues, with a focus on social inclusion;
Developing regional solutions as a contribution to global governance issues, and building knowledge to manage the challenges in store for and support Africa’s next-generation.
This report has been prepared ahead of the 51st session of the Conference of African Ministers of Finance, Planning and Economic Development, taking place on 11-15 May in Addis Ababa on the theme, “African Continental Free Trade Area and fiscal space for jobs and economic diversification”.