During the World Economic Forum Africa convention that took place from the 11th to the 13th of May this year quite a number of issues concerning the development and the general socio-economic progress of Africa were put forth. This is one of the several fora that present opportunities to track and evaluate the economic dispensation about the African Rising narrative and to find out if it is sustainable not just in the short-term but in the long-term.
For over ten years the average economic growth rate for Sub-Saharan Africa has been pegged at 5% which is a relatively robust growth rate in comparison with the other continents in the world. That majority of African countries have made turn-arounds in terms of macro-economic policies among other fundamental economic reforms isn’t something to ignore but rather a fact that needs to be appreciated considering that the number of the chaos occasioned by political and economic turbulence has significantly reduced.
The surge in the economic performance of various African countries remains questionable due to one particular aspect: and this is the slowness with which the structural transformation has taken place. Many policy analysts thus question just how sustainable this narrative of Africa Rising is. As a matter of fact, poverty levels still remain relatively high although notable progress has been made in the education sector, the health sector and the governance aspect of the various political systems. Such progress in the afore-mentioned areas is largely attributable to the Millennium Development Goals(MDGs) which were formulated in the year 2000. We can therefore partially conclude that the recent positive economic growth that has been witnessed generally across the African continent has been significantly contributed and boosted by the desire to attain the MDGs which were replaced by the Sustainable Development Goals(SDGs) in September 2015.
For structural transformation to be effective in terms of poverty reduction and the subsequent sustainability of the Africa Rising narrative, then certain factors that are primordial need to be taken into account. One of the key factors that will enhance Africa’s economic growth rate is undoubtedly the aspect of intra-trade.
To register significant steps in terms of economic development African countries ought to increase the levels of trade amongst themselves. According to statistics by the United Nations Organization the level of intra-trade in Africa stands at around 12% compared to 40% in North America and 60% in Europe. Comparably, it is fair enough to remark that we still have a long way to go though sometimes such comparisons ought to be made with consideration in view of the periods of time that the other regions/continents registered their economic take-off.
The bottom line however remains that an increase in the level of intra-trade in Africa will have highly noticeable multiplier effects in terms of the economic growth and the structural transformation(economic development). For high levels of intra-trade in Africa to be realized attention has to be paid to the hindrances fronted by the numerous regional economic blocs that are in existence on the continent.
It will be delusional to portend that intra-African trade will prosper on the ideals of the various economic blocs that have been established. In due course, the regional economic blocs are diverse with each bloc granting preferential treatment to the commodities that are produced by the member countries. This hence implies that commodities that are produced by the members of the East African Community cannot be freely traded in the member countries of ECOWAS.
These regional blocs in as much as they have been helpful in promoting economic growth it is high time that their existence is put into question because of the high economic potential that they stifle. Establishing a free trade area in Africa or a customs union will be a milestone that will trigger rapid growth and socio-economic transformation.
The foreign aid that Africa has received for many years, the subsequent accumulated debts from such aid and the disadvantageous trade partnerships with the developed countries have created an unbalanced economic landscape in the continent and thus to achieve a balanced one means that more emphasis has to be laid on the establishment of a comprehensive and inclusive framework that creates impetus for the success of intra-African trade.
A balanced economic landscape as a result of robust and resilient intra-trade within the continent will imply the realization of more output and income from such. This will ensure that the levels of per capita income will rise significantly, savings will go up implying more investments. In fact the rising African population is a market that can be tapped and its synchronization with high levels of intra-trade will be a bigger plus. This in the long-run will ensure that Africa’s economic growth rate is sustainable and present just yet another story of an economic miracle in the world.