The African Development Bank (AfDB) projects Africa's average real gross domestic product could rebound to 3.8 percent in 2024 from 3.2 percent a year before. It projects Africa to remain the fastest-growing region in the world, after Asia, exceeding the global average of three percent in 2023. However, continent the needs giant leaps to see most its countries hit the lower middle-income mark within a decade.

Journalist William Kumwembe, engages African Union Development Agency-NEPAD, Chief Executive Officer, Nardos Beke-Thomas on what needs to be done.

To attain the middle-income level, most of the African countries are required to grow by at least seven percent per year for the next 10 years; is it possible?

Seven percent growth is something that is achievable.  At one point in time before the COVID pandemic, countries were able to register that growth rate, even two digits growth.  And COVID came and everything went down.  This year, collectively, we should expect average growth to go up to 4.3 percent.  Of course, there are so many structural problems and that is what we have to address so that we don’t go back and forth.  But we should have a growth that is consistently high so that it is not only just the growth, but we put many stakeholders at play.  Our problem is that with middle income countries, there is so much inequality because we don’t bring many people to become stakeholders of the economy.  We need broad-based growth and that is why industrialisation is critical.  Countries cannot only grow with trade and commerce.  We need manufacturing.  We need to industrialise.  And that is where the whole aspect of the value chain should be discussed; identifying the growth pillars and making sure that these supply and value chains are not only at national level, but also at regional and continental levels.

What would facilitate this desired growth?

 Infrastructure development remains critical and very important.  This continent is focusing on energy mixes and having one single energy market that would help address the most of the problems faced.  We are doing the groundwork that growth should be broad-based and ensuring that Africa is integrated and shared its resources and African countries trade with each other.  We can only build our value chain and be integrated if we really focus and see how we can trade among ourselves.  Of course, there are many issues that we need to address.  Growth is possible.  We are comparatively doing okay, except that it is not broad-based growth.

What is your impression of the African Continental Free Trade Area and level of embrace by countries?

The African Continental Free Trade Area secretariat is doing a remarkable job.  And we are doing the ground work in creating an enabling environment like creation of the one-stop-border posts which looks at facilitating the movement of goods and products.  These are mechanisms to make sure that we trade among ourselves.  It is only when we have finished goods that are competitive that we can trade with others.  And that could happen when we are all integrated and have an integrated economy and take advantage of our market with its population that is there and take advantage of its demographic dividend and the intelligent and creative young population.  Our job is to bring all these together and to make them impactful so that they are handled at a large scale.  We have to make sure that we have a shared economy.  We are trying to foster intra-Africa trade and promote that to the highest extent possible.

Most countries continue to grapple with soaring public debt, and this has proven to be a hinderance to growth.  What needs to be done?

Debt is not a problem.  The utilisation of these resources is what is important.  Focus should be on debt management in ensuring that the resources are beneficial.  Debt management is very important; so is debt restructuring and relief; negotiating for smooth movement.  We are looking at the creditworthiness as capital for Africa is becoming very expensive.  The credit rating companies are not doing us a favour, but we need to build our own capacity to have our own credit rating companies that look at our business, how we manage resources, the fiscal and monetary space and how we manage it all.  Sometimes we must build our capacity that helps us, in terms of getting capital.  I think there is so much to be done so that the financial infrastructure is well understood and well managed.

Source: William Kumwembe, Business Times