The present report provides a review of the progress made over the biennium 2014-2015 in implementing the work programme of the Economic Commission for Africa (ECA), with a focus on the results that have been achieved in support of Africa’s transformation agenda.

Following its reorientation in 2013 to focus more on strengthening its policy influence, earning greater credibility and trust, becoming more accountable and learning-driven and promoting greater operational effectiveness in support of Africa’s transformative agenda, ECA has played a crucial role towards advancing Agenda 2063: The Africa We Want.

The biennium under review was one in which African leaders collectively asserted their priorities and needs in the adoption of a number of key global and continental transformative frameworks for the continent’s economic and social development. The year 2014 saw the adoption of Agenda 2063, which is a forward-looking continental framework founded on the African Union vision of “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena”. Agenda 2063 guided the region’s priorities and collective voice in the development of the three key global development frameworks in 2015: the 2030 Agenda for Sustainable Development; the outcome of the third International Conference on Financing for Development (the Addis Ababa Action Agenda); and the 2015 Paris Agreement on climate change. These intergovernmental processes were informed by the common African position on the post-2015 development agenda and the Marrakech Consensus, both of which were developed with ECA assistance.

Central to the success of ECA remains its emphasis on applying robust, evidencebased policy research produced in-house and with growing interdivisional collaboration and stakeholder engagement to its key strategic priority areas. In its flagship Economic Report on Africa series, ECA continues to deepen research on Africa’s industrialization, which is imperative for its structural transformation. The 2014 report explored how to build innovative, effective and flexible industrial policy institutions, processes and mechanisms to enhance industrialization. Noting the centrality of trade for industrialization, the 2015 report assessed the bidirectional relationships between industrialization and trade. Similarly, its work and support to member States on trade negotiations contributed to the successful launch of the Tripartite Free Trade Area in June 2015, kicking off the continental free trade area negotiations and the African common position for the World Trade Organization Ministerial Conference in September 2015. The ECA African Climate Policy Centre leveraged its growing body of data, including forecasted climate data, climate science and research on the continent, to deepen understanding of the needs and implications for building climate-resilient economies and to inform the region’s position in the lead-up to the twenty-first session of the conference of the parties to the framework convention on climate change, held in Paris. The commitment of ECA to high-quality research is demonstrated by the 2014 perception survey of ECA partners. The findings revealed a favourable perception of the contribution made by the Commission in terms of its influence on development policy in the region, with 85 per cent of respondents perceiving ECA knowledge outputs as being of high quality and effective in promoting discussion on Africa’s transformative agenda, more than 70 per cent of respondents indicating that ECA knowledge delivery was highly sensitive to context, relevant and tailored, and close to 90 per cent of respondents agreeing that ECA generated reliable and relevant policy ideas.

Africa rising: megatrends in economic and social development

Africa’s economic growth declined moderately following the slight contraction in the global economy, which was mainly due to subdued growth in emerging markets and developing economies, while a chequered recovery continued in developed economies. Looking forward, Africa’s growth prospects remain positive as it continues to be driven by strong domestic demand and investment (particularly in infrastructure). The improving business environment, lower costs of doing business and better macroeconomic management continue to enhance investment. The buoyant services sector and a focus on non-oil sectors by oil-exporting economies to mitigate the continued decline in oil prices will contribute to the positive medium-term prospects. In addition, the increasing trade and investment ties both within Africa and between African and emerging economies, as well as the recovery of traditional export markets, particularly in the eurozone, will contribute positively to the medium-term prospects.

Developments in the global economy and implications for Africa

Global growth declined moderately from 2.6 per cent in 2014 to 2.4 per cent in 2015, reflecting subdued growth in investment and household final consumption. The economic slowdown and rebalancing of economic activity in China away from investment and manufacturing towards consumption and services; lower prices for energy and other commodities (affecting economic activity in countries such as Brazil and the Russian Federation, as well as in other commodity-exporting countries); and a gradual tightening of monetary policy in the United States of America, are some of the key factors that have weighed negatively on global growth.

The macroeconomic uncertainties that have persisted since the global financial crisis and the volatility of commodity prices will continue to shape the medium-term outlook. Exchange rate volatilities have become more pronounced against this backdrop of falling commodity prices, global growth patterns, declining trade flows, capital flows and diverging monetary policies. The continued decline in oil prices may generate a positive outlook for the African continent because of the number of oil importers, although oil exporters may see a deterioration of their current account balances and depreciation of their exchange rates. Tightening monetary policy in the United States will also enhance the movement of capital outflows from developing and emerging economies.

Africa’s economic performance and prospects

Africa’s growth rate (excluding Libya) declined slightly from 3.9 per cent in 2014 to 3.7 per cent in 2015 owing to the global economic slowdown. Yet, Africa’s growth is the second fastest after East and South Asia. Growth in Africa continues to be driven by domestic demand, with private consumption influenced by increased consumer confidence and an expanding middle class, while investment is driven mainly by an improved business environment and lower costs of doing business. Continued government spending on infrastructure projects, in particular, has also contributed positively to growth.

The external balance, however, had a negative impact on growth in 2015, as a result of weak and volatile commodity prices.

Private consumption continues to be the main driver of Africa’s growth

The growth rate of private consumption increased from 1.6 per cent in 2014 to 2.7 per cent in 2015. Despite the increase in African infrastructure development, gross fixed capital formation grew by only 1.0 per cent relative to gross domestic product (GDP) in 2015. This was mainly due to the reduction in capital inflows as a result of the slowdown in the global economy, especially among Africa’s development partners in the eurozone and some emerging economies, such as Brazil, China and the Russian Federation. Net exports continued to weigh negatively on growth in 2015.

Varying growth performance across economic groups and subregions

Despite the low oil prices, oil-exporting countries grew at an estimated 3.9 per cent in the biennium. That performance, attributable to declining oil prices being partially cushioned by healthy dynamics in the non-oil sectors in some countries, is higher than both oil-importing and mineral-rich countries, which had an average growth of 3.5 per cent and 3.0 per cent, respectively. Growth in those two groups of countries was mainly driven by private consumption, which increased by 2.5 per cent and 3.2 per cent relative to total GDP, respectively.

At the subregional level, East Africa maintained the highest growth rate in the region with 6.2 per cent in 2015, despite experiencing a decline in growth relative to 2014 levels. It was followed by West Africa, with 4.4 per cent, Central Africa, with 3.4 per cent and North Africa (excluding Libya), with 3.6 per cent over the biennium 2014-2015, and Southern Africa, with 2.5 per cent in 2015.

African countries’ growth still relies on a narrow base

While economic growth rates have been higher in Africa compared with most regions in the past decade, it is also clear that, in many African countries, growth has continued to rely on a narrow base. As a result, the number of Africans living in absolute poverty has risen and inequality remains a major concern. More importantly, Africa’s economic growth has been associated with increased exploitation of non-renewable natural resources with minimal value addition and employment generation, and growth sustainability remains a major concern.

Mixed impact of low oil prices on the growth of African economies

Crude oil prices continued to decline at a monthly average of 4.1 per cent over the period from June 2014 to October 2015. Robust supplies and lower demand due to the global economic slowdown have generally explained the decline in commodity prices across the board. ECA analysis using monthly data from January 2000 to October 2015 reveals that oil prices have had a significant positive impact on oil-importing and mineral-rich countries, but a negative impact on oil-exporting countries, which have increasingly sought a diversified growth path. Thus, the overall effect of low oil prices on Africa’s growth appears to be marginal. The marginal impact of oil price decline emphasizes the significance of the continued diversification initiatives being undertaken by African countries, especially into non-oil sectors, and the effects of improved macroeconomic management and associated fiscal policies.

Low commodity prices and large investment projects underpin the growing fiscal deficits

Africa’s fiscal deficit increased from 5.1 per cent of GDP in 2014 to 5.6 per cent of GDP in 2015. The continued decline of oil and other commodity prices reduced fiscal revenues in many African countries, whereas high spending on infrastructure, fiscal loosening and higher spending in the lead-up to elections in a number of countries contributed to increased expenditure over the period. The fiscal deficit is expected to narrow in 2016 to 4.6 per cent of GDP as commodity prices and growth in emerging and developed economies are expected to pick up.

Tight monetary policy amid falling commodity prices and declining revenues

African countries exercised tight monetary policy as global headwinds weighed on the region. As has been the case with most developing countries, the inflation rate rose from 7.0 per cent in 2014 to 7.5 per cent in 2015. The strong United States dollar and high food prices exerted inflationary pressures in the region, despite weak global growth and low commodity prices partially offsetting the rise in inflation. Currency devaluations, especially in oil-rich countries, amid falling oil prices and declining revenues and exports also exacerbated the rise in inflation. Those inflationary pressures, together with high fiscal and current account deficits, led to the tightening of monetary conditions, including the hiking of monetary policy rates in countries such as Angola, Ghana, Kenya, Malawi, South Africa and Uganda to curb inflation. However, a moderating trend is expected for the biennium 2016-2017 in view of lower food and energy prices, improved security situations and diminishing impacts from subsidy cuts.

Exchange rates continued to depreciate, although with minimal impact on exports

Most African currencies depreciated in 2015, a trend that started in 2014. This was driven partly by low oil prices, but also by the strong dollar and the expected tightening of the United States monetary policy. Currency depreciation is expected to be associated with increased exports and a decrease in imports. However, for African countries, the association between exchange rates and trade seems to be very weak and, in some countries, not in line with the theory. This could suggest that there are other factors behind Africa’s lack of competitiveness, which undermine the benefits brought about by currency depreciation. While the cost of doing business in Africa has been decreasing, there are still considerable barriers to enhancing Africa’s trade, suggesting a lack of product diversification and value addition.

Current account deficits recorded by all economic groupings and subregions

Current account deficits increased from -3.9 per cent of GDP in 2014 to -5.0 per cent of GDP in 2015, with all economic groupings and subregions reporting deficits. Declining commodity prices and global demand as a result of the global economic slowdown, especially in emerging economies, played a significant role in the current account trends, with oil-exporting African countries recording their first current account deficit since 2009 (2.1 per cent) in 2014, followed by a deficit of 5.1 per cent in 2015. For oil importers, the low oil prices led to a narrowing of the deficit. Of the subregions, the current account deficit was largest for Central Africa (8.1 per cent), followed by East Africa (7.4 per cent) and then Southern Africa (5.7 per cent).

Primary commodities continue to dominate Africa’s exports

Agriculture dominates most African economies, accounting for up to 58 per cent of GDP in some countries, such as the Central African Republic. The continent’s total exports of goods and services declined by 3.2 per cent in 2013 and 5.2 per cent in 2014, while its total imports grew by 3.0 per cent in 2013 and 1.7 per cent in 2014. The continent’s imports are dominated by consumer goods, whereas its exports consist mainly of primary commodities, including fuels and bituminous minerals, and agricultural products, such as cocoa, fruits, fertilizers and vegetables. Fuel exports fell by 13.2 per cent and ore and metal exports by 8.2 per cent in 2014. On a positive note, whereas Africa’s exports to most of its trading partners have stagnated or even declined since the global economic crisis, intra-African trade remains relatively strong by volume, and diversified in terms of manufactured products and services. Manufacturing goods as a proportion of total intra-African merchandise exports stood at 41 per cent in 2014, down from 44 per cent in 2013, while fuel exports stood at 31 per cent in 2014 compared with 29 per cent in 2013.

Medium-term growth prospects and risks

Africa’s real GDP growth is expected to increase by about 4.3 per cent in 2016 and 4.4 per cent in 2017. Growth continues to be driven by strong domestic demand. The improving business environment, lower costs of doing business and better macroeconomic management continue to enhance investment. The buoyant services sector and a focus on non-oil sectors by oil-exporting economies in order to mitigate the continued decline in oil prices will greatly contribute to the good medium-term prospects. Furthermore, the increasing trade and investment ties within Africa and with emerging economies, as well as the recovery of traditional export markets, particularly in the eurozone, will contribute positively to the medium-term prospects.

However, African economies face significant risks, such as climate shocks and terrorism concerns, which require special attention by policymakers to maintain the requisite growth. The turbulence in the global economy has been underpinned by severe financial instability, widening sovereign-debt problems and high unemployment, especially in developed economies.

Recent social developments

Africa made considerable progress towards achieving the Millennium Development Goals despite challenging initial conditions. The baseline, generally 1990 for most of the Millennium Development Goals, was relatively low compared to other developing regions. There is an overall positive direction, with significant proportions of progress with variation across certain Goals, across and within countries.

Status of progress towards social outcomes in Africa

Africa has witnessed improved economic performance for nearly two decades, but its pace and character has not been sufficiently robust to sustain poverty reduction or create jobs. Between 1990 and 2010, poverty levels across Africa fell, albeit at a slow pace, from 56.5 to 48.4 per cent, while between 1990 and 2013 there was only a meagre decrease of 8 per cent in the proportion of people facing hunger and malnutrition as conflict and adverse climate conditions drove food insecurity and malnutrition.

Nevertheless, Africa is close to achieving universal primary enrolment with 25 countries achieving a net enrolment rate of at least 75 per cent in 2013. The reported completion rates, however, lag behind enrolment, while challenges relating to quality issues persist. Gender parity in primary schooling improved from 0.86 before 2012 to 0.93 after 2012, but secondary and tertiary gender parity remain at 0.91 and 0.87, respectively. Under-five mortality fell from 146 deaths per 1,000 live births in 1990 to 65 deaths per 1,000 live births in 2012, an improvement of 55.5 percentage points, but below the target in Goal 4 of the Millennium Development Goals of a two-thirds reduction by 2015. The efforts to combat HIV/AIDS, malaria and tuberculosis have yielded noteworthy achievements in terms of incidence, prevalence and mortality.

Progress towards achieving environment-related goals has been slower, with only one quarter of Africa’s population having access to an improved drinking water source. Similarly, the proportion of people with access to improved sanitation has increased from 24 per cent in 1990 to just 30 per cent in 2012, and remains skewed towards urban areas. Poor rural infrastructure combined with population growth leads to land degradation and decreasing agricultural productivity, resulting in lower incomes and reduced food security.

Good progress, but persistent inequities

The variation in progress across goals and within countries seems to follow a pattern across income, gender, ethnicity and location. For example, apart from North Africa, only 23 per cent of poor, rural African girls complete their primary education. In some countries, children in the poorest 20 per cent of the population are three times less likely to be enrolled in primary school than children from the wealthiest 20 per cent.

Human capital

Africa’s human capital, though improving, is not linked tightly enough to industrialization, and certainly not to the green economy, as endorsed in the 2030 Agenda for sustainable development and Agenda 2063. Those agendas aim to transform economies by tackling their structural vulnerabilities and by including all their citizens, achieving sustainability built on solid social, economic and environmental foundations.

Africa is plagued by the twin problems of unemployment and underemployment, which mutually reinforce and exacerbate the widespread informal sector in countries. The highest unemployment rates in countries with data in 2012 were Mauritania (31 per cent), Lesotho (26.5 per cent) and Gabon (20.3 per cent). Women had higher unemployment rates than men in Lesotho, Egypt and Gabon, in part reflecting the different access to labour markets for women.

Employment

Unemployment rates for Africa (excluding North Africa), disaggregated by sex, were 6.9 per cent for males and 8.8 per cent for females in 2014, which represent marginal declines of 0.2 and 0.1 percentage points over the 2009 rates. Most jobs in Africa, particularly for young people and women, continue to be generated outside the formal economy, where the skills profile is predominantly poor. It is further observed that 9 out of 10 rural and urban workers in Africa have informal jobs, and most employees are women and young people.

Working age population

The active working age population (25-64 years) is growing more rapidly than any other age group, more than tripling in size between 1980 and 2015, when it stood at 123.7 million (33.3 per cent) and 425.7 million (36.5 per cent), respectively. The active working group is largely composed of young people and its growth over time is a statistical feature of the demographic dividend that could lead to productivity gains and economic growth in Africa. The demographic dividend depends on the young population having the right skills profile to secure the positive effects.

Urbanization

Over the period 2015-2020, Africa will experience the highest rate of urban growth globally, with a rate of 3.42 per cent annually, compared with the world rate of 1.84 per cent over the same period.

Beyond the demographic shift, urban areas currently contribute more than 55 per cent of GDP to African economies. The economic role of cities, however, is largely driven by consumption rather than production. Unlike other parts of the world, urbanization in Africa is not linked to industrialization, which in turn has led to “consumption cities” that are populated primarily by workers in nontradable services. Moreover, African cities remain largely informal. This is particularly problematic given the youth bulge in the region and the concomitant need to create decent jobs.

Conclusions

Economic growth rates have been higher in Africa compared with most of the regions in the past decade; however, in many African countries, growth has not been inclusive, the number of Africans in absolute poverty and those facing hunger has risen and inequality remains a major concern. More attention should be paid to inequality and social exclusion, for example, though proactive social protection programmes. This is mostly because Africa’s economic growth has been associated with increased exploitation of non-renewable natural resources with minimal value addition and employment generation, which undermines its growth sustainability. The growth of an unplanned urban Africa with a youthful population needs to be matched with a development process that provides the requisite skills and efficient and adequate public services delivery.

The informal sector has to be provided with policy packages of training, access to credit and social protection to increase productivity and contribute to improved welfare, particularly for young people and women. Africa must also improve its resilience to both environmental and socioeconomic shocks, manage its natural capital and minimize pollution, all of which can be achieved by greening its industrialization process. Given the erratic energy supply in most countries, the importance of reliable and sustainable energy sources for structural transformation cannot be overemphasized.

Achieving structural transformation in Africa: programme results achieved in 2014

Regional Integration and Trade Division

Within the framework of its subprogramme on regional integration and trade, ECA aims to promote effective regional cooperation and integration among member States, including regional approaches to tackling the challenges of trade, industry, agriculture and land. Current discourse on the structural transformation of African economies, and the recent launch of both the Tripartite Free Trade Area (between the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community) and the continental free trade area negotiations, provide a big-picture indicator of the salient objective being achieved.

ECA has continued to contribute significantly in supporting member States to adopt policies and regional initiatives to promote intra-African trade and better leverage other trade developments, such as the economic partnership agreements. It has also been intensively involved in major developments in the area of trade in Africa through the provision of technical support. One particular example is the support provided to the three regional economic communities involved in the negotiation of the Tripartite Free Trade Area which was launched in June 2015, and led to the kick-off of the continental free trade area negotiations. In cooperation with the African Union Commission and the African Development Bank, and through a consultative process involving the regional economic communities and the member States, ECA finalized the first edition of the African regional integration index. It also produced the upcoming seventh edition of Assessing Regional Integration in Africa, highlighting the need to promote innovation in Africa for successful structural transformation. The ECA human rights impact assessment of the continental free trade area, focusing on employment, food security and rural livelihoods, is expected to address vulnerabilities to be taken into account in the ongoing negotiations relating to the area. To that effect, ECA exceeded or met its targets, with 29 countries and three regional economic communities now developing or implementing policies or programmes in the context of free-trade areas or customs unions.

Technical assistance was delivered in the formulation and validation of the national and regional action plans for boosting intra-African trade and the continental free trade area (Gabon, Nigeria, Tunisia, the United Republic of Tanzania, East African Community, Economic Community of Central African States, Economic Community of West African States, Southern African Development Community and Arab Maghreb Union) and also in the formulation and validation of the Africa Growth and Opportunity Act national response strategy (Ethiopia and Lesotho). To make trade agreements more inclusive and equitable, member States were made aware of the evidence-based economic implications of not only the economic partnership agreements, but also mega-regional trade agreements. Technical support was also provided to the African group of countries in preparation for the tenth WTO Ministerial Conference. The number of common positions adopted or implemented by member States in the area of international trade or trade negotiation increased from 10 in the biennium 2012-2013 to 16 in 2014-2015 (compared with the biennium target of 15).

In addition to informing member States on the status of food security in Africa, ECA developed an initiative aimed at promoting and developing regionally coordinated agricultural strategic commodities value chains, with a view to strengthening the capacity of member States and regional economic communities to develop effective policies and strategies for the development of regional agricultural value chains. The initiative and related outputs are highly commended and supported by the African Union and fit into the framework of the Comprehensive Africa Agriculture Development Programme to promote and develop value chains, agribusiness and agro-industries. The initiative engages the development of a number of outputs, notably five regional assessment studies of regional agricultural value chains and agro-industrial cluster development; a capacity framework for the development and implementation of regional agricultural value chains and agro-industrial clustering; five cluster baseline assessment studies; and a draft policy framework and guidelines for the development and promotion of regional agricultural value chains in Africa, to be presented before the assembly of Heads of State and Government of the African Union for possible endorsement.

Concerning agricultural issues, ECA fully met its target to increase the number of countries from five to six (with the addition of the Democratic Republic of the Congo) and the number of regional economic communities from two to five (Common Market for Eastern and Southern Africa, East African Community, Economic Community of Central African States, Economic Community of West African States and Southern African Development Community) that have designed or implemented policies or programmes aimed at achieving agriculture development and food security.

ECA conducted a pan-Africa study to assess the existence of the necessary conditions for successful agriculture transformation. The findings of the study would feed into the development of a policy framework, to be adopted at the highest political level in Africa, aimed at promoting successful agricultural and rural transformation. The study should be launched in 2016. Farming systems analysis is a key approach for the development of the agriculture sector in Africa, and is expected to produce considerable economic gains for Africa’s agriculture and agribusiness sectors. In this context, ECA has developed a comprehensive review of agricultural production and food systems in Africa in the context of emerging trends. The contribution of ECA to farming systems in Africa has helped to enrich informed debate on reforming Africa’s agricultural productions and food systems in the post-Malabo context and in the light of Agenda 2063.

Cognizant of the role that private equity can play as a potential alternative source of investment in support of development efforts in Africa, ECA has, among other initiatives, raised the prospects for private equity in economic growth in Africa. In this context, ECA has developed a pan-Africa study entitled “Private equity and its potential role in economic growth in Africa: demystifying the asset class for policymakers”. The ninth African Development Forum provided an opportunity for ECA to propagate the findings of the study among stakeholders, including member States, the private sector and civil society organizations. The recommendations from the Forum on this matter were part of the body of knowledge that is encapsulated in a book by ECA, which, apart from its wide dissemination, also fed into the Third International Conference of Financing for Development. All of those efforts are expected to generate a high level of policy influence going forward. At this point, it can be said that the study has helped to generate awareness among member States on the existence and viability of private equity in the development finance discourse on Africa. It has also helped to demystify this asset class among policymakers, which, indeed, was one of the intended objectives of the study.

ECA has initiated ongoing policy dialogue surrounding bilateral investment agreements and investment policies, both at the national and continental levels. In the debate, emphasis has been on whether signed bilateral investments have significantly influenced the levels of trade in African member States.

Concerning energy, ECA has continued to provide support to member States and regional economic communities (including the East African Community and the Economic Community of West African States) in adopting clean energy technologies and policies with a view to achieving inroads to sustainable energy for all. ECA undertook a continent-wide initiative to strengthen the capacity of African countries to promote the use of renewable energy to achieve sustainable development and poverty reduction. The project looked at the potential of bioenergies and of policies in support of their development in the African context, with particular emphasis on liquid biofuels owing to their far-reaching positive effects.

ECA, dubbed the “champion” of Africa’s structural transformation, is now reviewing many of the existing industrial and trade policies of its members, including Guinea-Bissau and Swaziland, as well as those of the Common Market for Eastern and Southern Africa. For instance, ECA has developed a comprehensive stand-alone industrial and trade policy for Swaziland that spells out the economic philosophy of the Government in terms of industry and trade intervention measures and strategies to drive the country’s sustainable development in support of other programmes to meet its targets for 2022.

ECA conducted a review of industrial policies and strategies in Africa, which provided information on the development of industrial capabilities across the continent to fill the observed gaps in this area. The review comprised quantitative and qualitative analysis on current policies and initiatives regarding industrial development and on the status and trends of industrial indicators. In that connection, ECA organized the ninth session of the Committee on Regional Cooperation and Integration, on the theme “Enhancing productive integration of Africa’s structural transformation”. Apart from presenting the salient results and achievements of the subprogramme over the biennium 2014-2015, the session aimed at enhancing the awareness of African policymakers on the importance of industrialization and productive integration as the bedrock of Africa’s transformation. The session saw the participation of 49 member States and 6 regional economic communities. In parallel to the session, a policy dialogue on structural transformation in the new global landscape was jointly organized by ECA, the Economic Commission for Latin America and the Caribbean and the Organization for Economic Cooperation and Development, with the participation of the German Agency for International Cooperation, with a view to implementing concrete actions for knowledge-sharing in development policy for better understanding of policy challenges in the realm of production transformation and development. The event saw the participation over 100 stakeholders from international organizations, the private sector, academia, African officials and non-governmental organizations.

Concerning infrastructure, ECA has contributed to the development of the Programme for Infrastructure Development in Africa monitoring and evaluation model for trans-Africa infrastructure projects to enhance regional projects implementation. A road map for the accelerated implementation of the African Action Plan for the Decade of Action for Road Safety was adopted by the African Union Commission during the regional review meeting on road safety, held in July 2015. ECA, in collaboration with the African Union Commission and the World Bank, organized a side event on implementing and achieving the goals for that Decade, in particular the challenges and opportunities for Africa, at the second African Road Safety Conference, held in November 2015.

In general, full progress was made towards increasing the number of countries and regional economic communities developing policies or programmes in the areas of industrialization, infrastructure, energy or investment, from 8 to 17 and 1 to 3, respectively.

Concerning the implementation of the Declaration on Land Issues and Challenges in Africa, progress was made with regard to increasing the number of member States and regional economic communities designing or implementing policies and programmes to address land governance challenges. The 11 additional States were Angola, Burundi, Côte d’Ivoire, Ethiopia, Kenya, Malawi, Niger, Somalia, South Sudan, Swaziland and Zambia, while the communities were the Common Market for Eastern and Southern Africa, the Economic Community of West African States and the Intergovernmental Authority on Development. The subprogramme contributed to that achievement by strengthening the capacity of member States and the communities through the implementation of joint programmes aimed at mainstreaming land governance issues in strategies and programmes, undertaking research to generate evidence for robust land policy options and developing a monitoring framework to track progress in land policy processes.

ECA inaugurated a biennial conference on land policy in Africa, which attracted over 350 participants and produced 85 papers. ECA also established a dedicated website on its land policy initiative, which serves as a useful source for access to land-related information and as a land information database.

To enhance the capacity of land stakeholders and land governance and administration institutions in Africa, ECA, in partnership with the United Nations Human Settlements Programme, produced a background document and capacity development framework, and organized several training activities with partners – such as the Pan-African Parliament and the Regional Centre for Mapping of Resources for Development – for Economic Community of West African States lawmakers and over 50 land stakeholders from 20 English- and French-speaking countries. In addition, ECA developed training programmes on gender and grass-roots participation in land policy. Furthermore, it conducted a number of studies covering a broad range of land issues, including the role of parliamentarians in land governance, women’s land rights and the development of guidelines for land governance curricula in universities and higher-education institutions. ECA also managed to secure financial support from the Government of Germany to support the establishment of a pan-African network of excellence on land governance. ECA also conducted advocacy activities in various international forums or high-level events on agriculture within and outside Africa to increase awareness of land governance. ECA is currently reviewing over 20 requests for technical assistance from member States and partners, and has continued to support a series of country and regional pilot projects on land governance and land mainstreaming with partners such as civil society organizations, the Pan-African Farmers Organization, the International Fund for Agricultural Development, the European Union and the Intergovernmental Authority on Development. ECA, in partnership with the Food and Agriculture Organization of the United Nations, is providing transversal support to 10 African countries for the integrated implementation of the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security, and the Framework and Guidelines on Land Policy in Africa, to improve land governance in those countries for improved food security.

Following a report on the progress in implementing the Declaration on Land Issues and Challenges in Africa, presented to the inaugural Conference of the Specialized Technical Committee on Agriculture, Rural Development, Water and Environment in October 2015, the African Union Conference of Ministers endorsed a number of recommendations on land policy. They included the establishment of an African land policy centre and a fund to facilitate resource mobilization for the centre; the adoption of a monitoring and evaluation framework to track progress on land policy; the commitment to apply the Guiding Principles on Large Scale Land Based Investments in Africa in order to promote agricultural investments; and a target to allocate 30 per cent of land to women and to secure their land rights through legislative reforms and other mechanisms.

The way forward: strategic development issues to be tackled in the coming biennium

The overall objective of the ECA biennium programme plan is to promote inclusive and sustainable economic and social development with a view to accelerating Africa’s structural transformation, in line with the priorities and vision articulated in Agenda 2063, the NEPAD programme and Agenda 2030 for Sustainable Development.

The mandate for the programme is derived from Economic and Social Council resolution 671 A (XXV), by which the Council established ECA. Further mandates have emanated from the outcomes and decisions of major global conferences and summits, including the United Nation Conference on Sustainable Development, the International Conferences on Financing for Development, the sessions of the Conference of the Parties to the United Nations Framework Convention on Climate Change, the Conference of African Ministers of Finance, Planning and Economic Development and the ordinary sessions of the Assembly of the African Union.

Many African economies have continued to see solid growth over the past decade, which also saw African Governments making progress in advancing economic and social development, including meeting some of the Millennium Development Goal targets by 2015. However, the current economic growth of Africa is not all positive. It is generally not accompanied by much-needed structural transformation and diversification and often does not translate into equitable human development and improved livelihoods for the majority of people. Countries across Africa are becoming richer, but whole sections of society are being left behind and wealth disparities are increasingly visible. The current pattern and quality of growth is unsustainable and could undermine the continent’s chances of achieving transformation and sustainable development. Unequal access to health care, education, water, sanitation and other infrastructure is reinforcing inequality. Smallholder agriculture has not been part of the growth surge, leaving rural populations trapped in poverty and vulnerability. The deep, persistent and enduring inequalities in evidence across Africa have economic, social and political consequences, which in the long run undermine economic growth, productivity and the development of markets, weaken confidence in Governments and institutions, and create conditions for open conflict and social unrest, as the recent experience of some African countries has shown.

The central message is that economic growth alone is not enough. It must be accompanied by deliberate and proactive policies to reduce inequality and promote inclusion. Sustaining positive trends and achieving inclusive growth and development is the overriding development policy challenge that African countries must tackle as an urgent priority. In order to realize this objective, several related challenges and constraints need to be addressed, including achieving higher, sustained and equitable growth; investing in human development, including education, health care, infrastructure and job creation; boosting agriculture and food security; speeding up the pace of regional integration; promoting trade, including intra-African trade; and enhancing State and institutional capacity for improved economic management. Ensuring gender equality and building national statistical capacity should also remain top priorities. Resource mobilization is a critical cross-cutting challenge that must be addressed if Africa is to make progress in those areas. Sustaining positive trends will also depend critically on a favourable international environment that supports the special needs of Africa, particularly with respect to climate change, international trade and enhancement of the continent’s voice in key global decision-making forums and processes. These are the major issues and challenges that underpin the development of the Commission’s programme of work for the biennium 2016-2017.

Consistent with its mandate, the overall strategy of ECA for achieving the objectives of the programme will continue to centre on the nine interdependent and complementary subprogrammes, which were approved by the General Assembly as part of the restructuring of ECA. The overall strategy of the subprogrammes will consist of developing economic and social analyses and preparing reports to monitor and track the progress of Africa on global and regional commitments; formulating policy recommendations, guidelines and standards to support policy dialogue; organizing policy dialogue to facilitate consensus-building and the adoption of common regional positions on key issues; and providing technical assistance and capacity-building in the form of advisory services and training to disseminate best practices. An important element of the strategy is strengthening and expanding existing networks in order to generate, update and disseminate relevant information and facilitate the exchange of experiences and good practices among policymakers, civil society, academia and other stakeholders. Additionally, special efforts will be made to ensure that the gender mainstreaming strategy of ECA is reflected throughout the nine subprogrammes. The subprogrammes, which are outlined below, focus on thematic or sectoral priorities that are key to the transformation of Africa.

Macroeconomic policy

The main strategic focus of the subprogramme will be to contribute to accelerating the transformation of African countries from low to middle-income status. An important element of the strategy is to engage in applied research to develop policy recommendations to support member States in the design of appropriate macroeconomic policies and programmes to achieve strong, inclusive and environmentally sustainable growth, create jobs, foster gender equality and women’s empowerment, and accelerate the process of economic development within a framework of good economic governance.

Regional integration and trade

The work of the subprogramme will focus on policy research, consensus-building and the provision of advisory services in support of the efforts of the African Union Commission, member States and regional economic communities towards achieving structural transformation in Africa through trade, investment, industry, agriculture and land management for inclusive and sustainable development. Policy research, case studies and capacity-building programmes will be undertaken to boost African cross-border investment, intraAfrican trade and Africa’s negotiating capacity in multilateral trade negotiations in the context of fostering the continent’s integration.

Innovation, technology and management of Africa’s natural resources

The strategy will focus on research, policy development and analytical work to support member States in the following areas: promoting the use of social, economic and environmental innovations and technological systems; developing mineral resources in the context of the Africa Mining Vision; advocating policy-relevant research and analysis to inform the formulation and implementation of green economy policies in the context of sustainable development and poverty eradication and to realize optimal benefits from Africa’s natural resource endowments; and helping member States to address climate change challenges in key sectors and putting in place appropriate plans and mechanisms to reflect national development priorities, policies, strategies and programmes.

Statistics

The goal of the subprogramme is to increase the capacity of African countries to collect, compile and use high-quality, comparable and harmonized statistics, with a view to monitoring the implementation of the Sustainable Development Goals, and to support regional integration, including through the harmonization of methods for censuses, surveys, national accounts, economic classifications and Sustainable Development Goal indicators, in compliance with international methodologies such as the 1993 and 2008 systems of national accounts.

Capacity development

This subprogramme will play a vital role in ensuring that the key policy findings from ECA research are used to support policy implementation at the national, subregional and continental levels. It will do so by strengthening the capacity of member States, regional economic communities and the African Union and its organs to implement their development priorities in line with the priorities and vision articulated in Agenda 2063, the NEPAD programme and the 2030 Agenda for Sustainable Development.

Gender and women in development

This subprogramme will help member States to develop and implement economic and social policies that address gender issues and women’s empowerment concerns; enhance gender mainstreaming in national policies, programmes and strategies; monitor and report on the implementation of United Nations global and regional commitments on gender equality and women’s rights; and promote the collection and use of data disaggregated by gender.

Subregional activities for development

The five ECA subregional offices, which are responsible for the implementation of the components of this subprogramme, are located in Rabat, for North Africa; Niamey, for West Africa; Yaoundé, for Central Africa; Kigali, for Eastern Africa; and Lusaka, for Southern Africa. The subprogramme will focus on producing regular country profiles and risk analyses. The country profiles will include research, analysis, forecasts, indicators and trends, in addition to statistics on issues such as output, trade, agriculture, macroeconomics, monetary and financial variables, and remittances. The aim of the profiles is to produce policy advice in support of the development agenda of the member States.

Development planning and administration

Responsibility for the implementation of the subprogramme lies with the African Institute for Economic Development and Planning, which is the training arm of ECA and is a premier capacity development resource for African Governments. The Institute will work in close coordination with ECA divisions, subregional offices and centres. The Institute’s strategy will take into account the emerging demands of member States and in particular the priorities of the African Union, as reflected in Agenda 2063. The activities to be implemented include comprehensive training and technical cooperation services for Governments and other relevant stakeholders, applied research and the development of knowledge networks among stakeholders, particularly those relating to public sector performance in the region. Strategically, the Institute aims to contribute to expanding the capacity of African countries to autonomously deploy development planning tools to achieve the core goal of structurally transforming their economies and societies. The Institute will expand its global partnerships, including through collaboration with African universities and think tanks, with a view to enhancing its capacity to deliver decentralized courses across Africa. Furthermore, e-learning opportunities will be provided to officials from member States in order to enhance programme scale, reach, presence and impact, and promote a culture of continuous learning and retooling. Opportunities for tailor-made capacity-renewal and enhancement interventions will be explored, and efforts will be made to build interfaces between public sector managers and leaders and relevant actors from the private sector and civil society.

Social development policy

The subprogramme will focus on the following thematic issues: measuring inclusive development and mapping policies to reduce exclusion; monitoring social investments; identifying policy options to guide public and private efforts to improve the opportunities available to young people, with a view to reducing the intergenerational transmission of poverty and inequality; developing frameworks to better harness the demographic dividend; formulating principles for creating inclusive cities and integrating them into public policies; and providing support for the development and implementation of national urban policies. The subprogramme will also follow up on international and regional agreements on social development, employment, young people, population and urbanization.

Strategic partnerships will continue to be central to the implementation of the biennium programme plan. In line with its new partnership strategy, ECA will leverage its comparative strengths to engage a wide range of partners from within and outside the United Nations system in order to maximize the impact of its work. To that end, ECA will continue to be involved in the work of the Executive Committee on Economic and Social Affairs, which is the main vehicle for ensuring policy and operational coherence in United Nations development activities, and seek to enhance its collaboration with the United Nations Development Group. It will also continue to build on its existing partnerships with the African Union, the African Development Bank and other regional organizations, as well as with African civil society and private sector organizations. Inter-agency coordination and collaboration among United Nations agencies working in Africa will continue to be strengthened through the regional coordination mechanism of the agencies convened by ECA in support of the African Union and its NEPAD programme at the regional and subregional levels. In addition, ECA will work closely with the other regional commissions to develop joint initiatives and inputs with a view to strengthening the regional dimension of global development. At the national level, ECA will work closely with the United Nations resident coordinator system to exploit the inherent strengths of the funds and programmes. Lastly, partnerships with other stakeholders, including the private sector, civil society, universities and research institutions, will be developed and enhanced.

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This report has been prepared for the Ninth Joint AUC-ECA Annual Meetings of the AU Conference of Ministers of the Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development, taking place from 31 March to 4 April 2016.