To address the significant challenges and the new opportunities facing the African continent, the Africa Commission recommends the development of a refocused agenda for international development cooperation with Africa. Creating jobs for Africa’s increasing youth population requires private sector-led growth through reforms which improve competitiveness. For this agenda to be successful, Africa will have to raise confidence in its economic prospects. African governments should focus more on attracting private capital for investment. They must assert ownership over necessary reforms and demonstrate good governance. Development partners should support the agenda and deliver on their aid commitments. Their assistance must support long-term development.
Due to the demographic transition youth will comprise an increasing share of Africa’s growing population. This larger and younger working force constitutes a significant opportunity for Africa - but only if more jobs are created. If the political will can be mobilised, the energy and talent of Africa’s young women and men will be a force for positive change in Africa.
The recommendations and the five initiatives contained in this report are not intended to answer all the challenges of Africa, but point to priority areas which require urgent action if Africa is to achieve its full potential. African countries are different. There cannot be a ’one-size-fits-all’ solution. The recommendations of the Africa Commission, which focus on Sub-Saharan Africa, are backed up by existing knowledge and innovative thinking and expand on ideas which have worked. The Commission offers concrete, actionable initiatives to address the need for greater growth as a necessary precondition for sustainable development and poverty reduction.
Refocusing international development cooperation with Africa
The recommendations contained in this report have been accentuated by the present global economic crisis which is hitting most African countries hard. The need to address Africa’s challenges and opportunities for promoting growth, job creation and poverty reduction has never been more urgent. Africa could benefit much more from globalisation. One way is to reduce its dependency on commodities and have the private sector add more value to its products. This would create more productive and decent jobs for the growing number of young people.
Against this background, the Africa Commission proposes private sector-led growth as the most effective way to create more and better jobs. In this respect, agriculture has a crucial role to play in most African countries. Inclusive growth that generates decent work and income is the best way to reduce poverty in Africa. Focus must be on increasing competitiveness of private enterprises, including agro-business. This will require strong partnerships between the public and the private sector to eliminate barriers to growth.
Growth driven by private investments also leads to higher revenues for governments to finance vital social services and infrastructure. It will contribute to reducing aid dependency of developing countries. Strong growth and employment opportunities are required to achieve the Millennium Development Goals including sustaining progress in health, food security and education. This must be recognised by the 2010 UN MDG review conference.
Progress on governance is a prerequisite for economic growth and development. Efforts should aim to develop effective and robust public sectors that combat corruption, protect property rights and ensure the rule of law, promote gender equality and strengthen the role of civil society and the private sector in holding governments accountable.
National development strategies should be further developed and implemented based on consultative processes involving the private sector, business associations, labour market associations and civil society. The aim should be to improve the business environment by maintaining and expanding major infrastructure, financial markets and skills development and other measures that enhance competitiveness. International development assistance must build upon and support such strategies.
The international community must do more to open markets, including for south-south trade. Goods from African countries should be granted full and free access to markets, including through easing the rules-of-origin requirements and phasing-out trade-distorting subsidies. Relative to other developing countries, there is a case for allowing African countries privileged access to markets, at least for a limited period of time.
The potential of the African youth must be realised by giving them influence over policies and strategies. Tapping into the creativity and knowledge of young people could prove a crucial asset for boosting economic development on the continent. Young people should therefore be given a much needed voice and the opportunity to participate in decision-making.
The Africa Commission has identified five key areas of main concern to growth, employment and competitiveness:
1. Benchmarking African Competitiveness
The Africa Commission recommends focusing on those particular constraints that prevent African businesses from growing through exports in order to improve Africa’s competitiveness in the global economy. The use of competiveness indices should be promoted as advocacy tools to ensure ownership among African governments, the private sector and civil society in the results dissemination and follow-up process.
The Africa Commission, in partnership with the World Economic Forum and the African Union, will ensure coverage of a significant and increasing number of African countries in the World Economic Forum’s Global Competitiveness Index, and encourage policy impact through measures to engage business and government leaders in a results-based dialogue on the required reforms
2. Access to investment finance and capacity development for small and medium-sized enterprises
The Africa Commission recommends that the financial sector in African countries scales up investment finance for small and mediumsized enterprises (SMEs) and develops the necessary capacity. For their part, African governments, supported by international development partners, must provide a predictable regulatory framework, facilitate capacity development of financial institutions and enterprises, and provide effective market-based instruments that increase access to investment finance.
The Africa Commission will develop an African Guarantee Fund in partnership with the African Development Bank to foster the growth of financial resources available for the investment needs of small and medium-sized enterprises and for capacity development of financial institutions. Furthermore, the Commission will launch a complementary facility for enterprises to improve their business management and technical skills in order to gain access to investment finance
3. Unleashing African Entrepreneurship
The Africa Commission recommends an increased focus on young entrepreneurs as drivers of change. Such a renewed focus should be reflected in policy dialogues, poverty reduction strategies or other development plans and budgets. African governments together with stakeholders must promote entrepreneurship as a viable, pro-poor development strategy, given that most new jobs are being created through small enterprises and self-employment. In particular, the development of comprehensive programmes directly aimed at promoting young entrepreneurs in setting up and growing viable businesses should be considered.
The Africa Commission will together with the International Labour Organisation develop packages of assistance to young existing and would be entrepreneurs complementing entrepreneurship training with advisory services, mentorship, and access to finance for both rural and urban entrepreneurs. In order to strengthen the sustainability of this initiative, all enterprise support services will be offered through existing local providers like business associations, youth-led organisations, private consultancies and training providers, or public agencies
4. Access to Sustainable Energy
The Africa Commission recommends increasing production, distribution and productive use of electricity and other forms of energy in a cost-effective and climate-friendly manner. This need has to be addressed at regional, national and local levels. In communities with limited access to energy, the need can be met by an efficient utilisation of local and renewable energy sources. The private sector, in particular small and medium-sized enterprises, must play an important role in the provision of energy services at the local level. This potential should be utilised by stimulating and expanding the market for decentralised energy services.
Together with the African Development Bank the Africa Commission will address the African energy deficit. The initiative will stimulate and expand the emerging market for sustainable energy, primarily in rural areas, by strengthening the role of small and medium-sized enterprises in delivery and productive use of energy from local and renewable energy sources. It will build upon positive experiences with decentralised energy systems in Africa and contribute to the Africa-EU Energy Partnership
5. Promoting Post-Primary Education and Research
The Africa Commission recommends focusing on and investing in post-primary education based on the requirements of the private sector. Investment should be enhanced in secondary education, specifically within technical and vocational skills development for young women and men. African countries and regional organisations, supported by development partners, should also promote better linkages between university education, research and the private sector in agricultural development and value chains.
The Africa Commission recommends the expansion of the Education for All – Fast Track Initiative to include post-primary education, including technical and vocational skills development, as part of a comprehensive approach to education for all.
The Africa Commission will launch an initiative along two tracks. Track One will promote innovative ways to expand technical and vocational skills development focusing on out-of-school youth by upgrading existing apprenticeships and developing demand-driven technical and vocational training in under-served rural communities. Track Two links university education, research and private sector development in sustainable agriculture and agro-business to increase the business skills of graduates and promote innovation with a special focus on value chains. This track will be implemented in partnership with the African Union Commission through its agreement with the Forum for Agricultural Research in Africa.
Process: Next Steps
All initiatives will be implemented jointly by African countries and international development partners through African organisations. The work initiated by the Africa Commission does not end with this report, which is only one step along the way. The success of this Commission will ultimately be judged by the achievement of its goals in providing more opportunities for Africa’s youth, women and business to prosper.