OECD / Africa: State action is the key to growth, jobs and the fight against inequality

The Commission of the African Union (AUC) and the Organization for Economic Co-operation and Development (OECD) published the first edition of the report "Addis Ababa" yesterday. Dynamics of Development in Africa. "

According to the latter, favorable trends in commodity prices, robust domestic demand, progress in macroeconomic policies and diversification strategies for national economies have been the main drivers African growth, which is expected to reach 4% per annum between 2018 and 2020. The same is true for the choice of some countries to increase investment in infrastructure and its business partnerships – particularly with China, India and other emerging countries. Nevertheless, this growth has not been sufficient to trigger substantive changes.

The report, devoted to the theme "growth, employment and inequality", underlines the importance of accelerating the structural transformation of African economies . Growth remains irregular. Thus, during the 2016-20 period, only three out of the continent's fifty-five countries are expected to achieve the target of an average annual growth rate of more than 7% set by Agenda 2063 of the World Bank. African Union

Moreover, this growth has not created enough decent jobs. Today, 282 million people are in precarious jobs. At this rate, 66% of jobs will remain vulnerable in 2022, well above the target of 41% by 2023, as the continent's population grows very rapidly – a quarter of the world's population will be African by 2050

The report also highlights the need to increase productivity: African companies lag significantly behind the world in sectors with high job creation potential, such as agribusiness, construction, leather, light manufacturing and logistics services. Finally, growth in Africa has a smaller effect on reducing inequalities and improving well-being than elsewhere in the world.

If the Gini coefficient of the African continent had fallen by an additional 7 points for at 35-that is, the current level in Asia-growth would have lifted an additional 130 million people out of poverty for the period 1990-2016. Despite a decline in extreme poverty, it still affects 35% of the population on the continent or 395 million people.

The report also reveals the contrasting performance of different regions in Africa in terms of growth, employment and inequalities. East Africa has enjoyed stronger and more resilient economic growth than other regions, more than 4% per year since 1990, thanks to a more diversified economy. While underemployment and vulnerable employment characterize the majority of African labor markets, some countries in Northern and Southern Africa also face high structural unemployment.

In Central Africa, the number of jobs in the formal sector has been declining since 2015. East and West Africa managed to reduce their extreme poverty rates by 23 and 12 percentage points respectively between 1990 and 2013.

Southern Africa is Africa's most unequal region, with six of the world's 10 most unequal countries in terms of income. The report stresses that public action is the key to better performance in growth, employment and inequality: national strategies are most effective when they promote good cross-sectoral coordination of government action; active participation of economic actors and citizens, and a territorialized approach to development

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