Africa remains hostage of inequalities

Construction workers are seen standing on a scaffolding on a oil tank at the Dangote Oil Refinery under construction in Ibeju Lekki district, on the outskirts of Lagos, Nigeria July 5, 2018. Picture taken July 5, 2018. REUTERS/Akintunde Akinleye

The report of the African Union and the OECD draws attention to persisting inequalities in Africa and to the scarcity of skilled jobs on the continent.

Entitled Development Dynamics in Africa in 2018: Growth, Employment and Inequalities, the document notes that the continent has grown steadily in economic terms over the last two decades but this growth has not prevented the persistent inequalities and the lack of opportunities for the creation of highly skilled jobs.

The report draws attention to the fact that, in view of this, the achievement of the objectives of the African Union Agenda 2063 for development, is compromised. And that greater priority should be given to promoting job creation, inclusive growth and, consequently, reducing inequalities.

Since 2000, Africa has tripled its Gross Domestic Product (GDP) and its trade with countries such as China and India, which increased from $ 276 billion that year to $ 806 billion in 2016, 51% of this value is related to exports and 46% to imports. However, the number of people living below the poverty line continues to increase and the percentage of people with jobs considered to be precarious is still very high, 66% (about 282 million people), far from the figure established by Agenda 2063, which is 41% in 2023.

Extreme poverty levels fell from 45% in 1990 to 35% in 2013 but the number of people living in this situation has increased due to demographic growth, from 280 million to 395 million.

At the same time, GDP growth is not matched by the creation of skilled jobs, which remains at only 34%. The report stresses the importance of job creation in the formal economy in order to respond to population growth, to consolidate the middle class and ensure a better income distribution, which continues to suffer from large imbalances.

Growth above 5%

But the framework is not uniform across the continent, with East African countries showing growth rates of around 4% since the 90's, although they are not able to consistently reduce the extreme poverty levels that still affect around 35% of their population. By contrast, the countries of North Africa, despite some unstable political and economic circumstances, have managed to reduce the rates of extreme poverty. In Central Africa, growth rates are also above 5%, but job creation, in the framework of formal economy, is unbalanced. In southern Africa, growth has been stable but the response to the entry of more than one million people per year into the labor market, has not been adequate. Finally, in West Africa, growth rates are above 5%, with countries such as Nigeria, Ghana and Côte d'Ivoire registering the highest figures.

It is underlined that, in this context, the objectives of Agenda 2063 will not be fulfilled. The report contains some recommendations for overcoming the highlighted negative elements, such as the need to create better conditions for investment, the focus on regional strategies in the industrial and technological sectors and also on transport networks, the liberalization of imports of intermediate goods and equipment, the focus on education, especially higher education, strengthening of social security systems, improvement of tax systems and boosting the fight against poverty.

It was the first time that the AU's Economic Studies Department and the OECD Development Center collaborated in developing such a survey.

Read the full report here