(Ecofin Agency) - African nations would need to inject more funds into human capital to ease inclusive growth and propel productivity, the AfDB revealed in its 2020 African economic outlook entitled “Developing Africa’s workforce for the future.”
According to the report, the economic outlook in Africa continues to improve. Real GDP growth rate, estimated at 3.4% for 2019, is expected to accelerate to 3.9% in 2020 and 4.1% in 2021. But this overall rate masks significant cross-regional and cross-country variation. 20 countries on the continent are expected to reach growth between 3 and 5%, while 20 others should go beyond 5%.
The report says 6 of the 10 fastest growing economies in the world are now in Africa. These include Rwanda (8.7%), Côte d'Ivoire (7.4%), Ethiopia (7.4%), Ghana (7.1%), Tanzania (6.8%) and Benin (6.7%). For the first time in more than a decade, growth in Africa is largely due to investment spending- especially in infrastructure - rather than consumption.
However, the report says, investment in physical infrastructure, though important, is not enough to stimulate the growth and productivity necessary for African economies. Countries should also accelerate investment in the development of human capital. “Youth unemployment must be given top priority. With 12 million graduates entering the labor market each year and only 3 million of them getting jobs, the mountain of youth unemployment is rising annually,” AfDB’s President Akinwumi Adesina said.
“Africa needs to build skills in information and communication technology and in science, technology, engineering, and mathematics. The Fourth Industrial Revolution will place increasing demands on educational systems that are producing graduates versed in these skills,” the report noted. The education system must adequately prepare young people for the job market. Priority must be given to improving access to vocational training, to reduce the mismatch between training and the needs of the labor market. Countries should also focus on on-the-job training opportunities for young people.
According to Adesina, growth should be felt by every individual in the countries. “Nobody eats GDP. Growth must be visible. Growth must be equitable. Growth must be felt in people's lives,” concludes Akinwumi Adesina.