African Development Bank’s flagship publication, published annually since 2003, provides headline numbers on Africa’s economic performance and outlook. The African Economic Outlook provides compelling up-to-date suggestions and analytics to inform and support African policy makers.The African Development Bank’s 2020 African Economic Outlook (AEO) revealed Thursday, indicates that public expenditures on education and infrastructure are highly complementary, as investing in both has a much greater payoff than investing exclusively in just one. The efficiency of education spending is much lower in Africa than in developing and emerging Asia.
Though the continent is enhancing education efficiency by spending 58 percent for primary schools in all African countries which has almost reached universal primary enrolment, without increasing expenditure at all. Key policies to improve spending efficiency and education quality include conducting education expenditure audits and reviews, improving teacher quality, and using performance based financing, the 2020 AEO noted.
Many Countries Experienced Strong Growth Indicators
Africa’s economic growth remained stable in 2019 at 3.4 percent and is on course to pick up to 3.9 percent in 2020 and 4.1 percent in 2021. The slower than expected growth is partly due to the moderate expansion of the continent’s “big five” Algeria, Egypt, Morocco, Nigeria, and South Africa whose joint growth was an average rate of 3.1 percent, compared with the average of 4.0 percent for the rest of the continent, the report reveals.
Former Liberian president Ellen Johnson Sirleaf, African ministers, diplomats, researchers, and representatives of various international bodies attended the 2020 edition launch, at the headquarters in Abidjan.
Johnson Sirleaf applauded the Bank for safeguarding the confidence of the people of the continent “… because we trust you. As simple as that. Because we trust you to share our vision. We trust you understand our limitations.”
Proclaiming Africa as the fastest-growing economies, she said, “There are stars among us… and we want to applaud them. We want to see more, particularly in countries like mine, which have been left behind, so that more can be done to give them the support that they need.”
The report also notes that in 2019, investment expenditure accounted for over 50% of GDP growth rather than consumption for the first time in ten years. This shift can help sustain and potentially accelerate future growth in Africa, increase the continent’s current and future productive base, while improving productivity of the workforce, according to the report.
In 2019, East Africa maintained its lead as the continent’s fastest-growing region, with average growth estimated at 5.0 percent; North Africa was the second fastest, at 4.1 percent, while West Africa’s growth rose to 3.7 percent in the same year, from 3.4 percent the in 2018.
Central Africa grew at 3.2 percent in 2019, up from 2.7 percent in 2018, while Southern Africa’s growth slowed considerably over the same period, from 1.2 percent to 0.7 percent, dragged down by the devastating cyclones Idai and Kenneth, report noted.
An Appeal to Address Learning and Talents Gap in Africa
The report also noted the urgent need for capacity building and offers several policy recommendations, which include that states invest more in education and infrastructure to reap the highest returns in long-term GDP growth. Developing a demand-driven productive workforce to meet industry needs is another essential requirement.
“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.
To keep the current level of unemployment constant, Africa needs to create 12 million jobs every year, according to the report. With rapid technological change expected to disrupt labour markets further, it is urgent that countries address fundamental bottlenecks to creating human capital, the report said.
“Youth unemployment must be given top priority. With 12 million graduates entering the labour market each year and only 3 million of them getting jobs, the mountain of youth unemployment is rising annually,” said Akinwumi Adesina, African Development Bank President, who unveiled the report.
“As we enter a new decade, the African Development Bank looks to our people. Africa is blessed with resources, but its future lies in its people… education is the great equaliser. Only by developing our workforce will we make a dent in poverty, close the income gap between rich and poor, and adopt new technologies to create jobs in knowledge-intensive sectors,” said Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at the Bank.