Press Conference on United Nations-African Union Economic Report on Africa

 

Africa can emerge as a global growth pole as it had become more attractive to foreign investors because of reforms and the resolution of conflicts, Rob Vos, Director of the Development Policy and Analysis Division of the Department of Economic and Social Affairs, today told correspondents at a Headquarters briefing.

Presenting the Economic Report on Africa 2012, a joint initiative of the United Nations Economic Commission for Africa and the African Union Commission, Mr. Vos said that the potential for the continent was also rising because of the richness of its natural resources, its youth power and its importance as a market.

He noted that Africa possessed 12 per cent of the world’s oil reserves, 40 per cent of the gold mining reserves, 80 per cent and 90 per cent of the chromium and platinum group metals, in addition to an abundance of agricultural land and vast timber resources.

Africa had a demographic advantage because of its very young population, he said.  It boasted the youngest population in the world, and that meant a rapidly expanding and improving labour force, which could hold great potential for economic growth in the decades to come.

In addition, Africa was becoming a major market of its own with growing intra-regional trade that had expanded quite strongly in recent years, he noted.  The continent represented an untapped regional market, which could help African countries attract higher levels of domestic and foreign investment.

He said that promoting visionary leadership, strong institutions and good governance would unleash Africa’s growth and development potentials.  Those included deepening democratic governance and the rule of law as well as improving economic governance, including the management of natural resources.

Other factors included unleashing Africa’s agricultural potential and investing in sustainable development, as well as human capital and technology, and infrastructure, he said, adding that Africa should also target regional economic integration and the harnessing of new partnerships in order to unleash growth.

Mr. Vos said that Africa’s growth had declined in 2011, primarily due to the political unrest in North Africa, but he remained optimistic about the prospects for 2012.  Many African countries not affected by that unrest had shown strong growth in 2011, driven by increased domestic demand and income, increased commodity export receipts due to higher prices and strong global demand, as well as the recovery of inflows of foreign direct investments.  Growth was poised to recover strongly in 2012 and beyond, supported by a similar set of factors.

The persistence of the euro area debt crisis, however, might affect Africa by reducing export receipts from sectors like commodities and tourism, he said.  That could also reduce and make capital inflows more volatile, especially with regard to foreign direct investment, official development assistance (ODA) and remittances, and could create exchange rate volatility.

Despite its strong growth for the past decade, Africa’s progress in achieving social and human development remained modest, Mr. Vos said.  Unemployment remained high, especially among the youth, while employment was vulnerable in low-productivity agriculture and in the informal sector.  Inequalities in incomes and access to assets and social services had widened, and poverty remained stubbornly high.  In that regard, accelerating structural transformation was the key to achieving Africa’s economic and social objectives.

He predicted that Africa would continue to grow at a rate of about 5 per cent per year in the coming years and that the continent would become a bigger player in the global economy.

Responding to a question by a correspondent, Mr. Vos said that African countries needed to diversify their economies so as to better protect themselves from external shocks.  They could benefit from the global economy, but needed to be careful not to be brought down by that economy.

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For information media • not an official record