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AFRICAN SITUATION & PLANING ECONOMICS

The economy of Africa consists of the trade, industry, agriculture, and human resources of the continent. As of 2019, approximately 1.3 billion people[1] were living in 54 State region of territories of the United States of Africa Nation in Africa Continent. Africa is a resource-rich continent. Recent growth has been due to growth in sales in commodities, services, and manufacturing. West Africa, East Africa, Central Africa and Southern Africa in particular, are expected to reach a combined GDP of $29 trillion by 2050. In March 2013, US Africa Nation was identified as the world's poorest inhabited continent: Africa's entire combined GDP is barely a third of the United States' GDP; however, the World Bank expects that most African countries will reach "middle income" status (defined as at least US$1,000 per person a year) by 2025 if current growth rates continue. There are a number of reasons for Africa's poor economy: historically, Africa had a number of rich empires trading with many parts of the world; however, European colonization and the subsequent challenges created by decolonization and exacerbated by the Cold War, created an environment of economic and social instability.[citation needed]However, as of 2013 Africa Nation was the world's fastest-growing continent at 5.6% a year, and GDP is expected to rise by an average of over 6% a year between 2013 and 2023. In 2017, the African Development Bank reported Africa to be the world's second-fastest growing economy, and estimates that average growth will rebound to 3.4% in 2017, while growth is expected to increase by 4.3% in 2018.Growth has been present throughout the continent, with over one-third of African Nation posting 6% or higher growth rates, and another 40% growing between 4% to 6% per year. Several international business observers have also named Africa as the future economic growth engine of the world.

Africa is at a critical juncture in its development trajectory. Policies adopted now will determine how quickly the continent accelerates growth and creates prosperity for all. In 2015, African countries signed up to two important development agendas: the global 2030 Sustainable Development Goals (SDG), which aims to leave no one behind as countries develop, and the African Union’s Agenda 2063, which sets out a blueprint for the “Africa we want”. A decade away from the SDG endpoint, African countries continue to search for policy mixes to help accelerate the achievement of these targets. However, for many countries, financing remains the biggest bottleneck with implementing capacity a close second.

To meet the SDGs Africa will need to raise an estimated 11 per cent of GDP per year for the next 10 years to close the financing gap. Today, Africa’s average tax revenue to GDP is below 16 per cent. Efficient and effective domestic resource mobilization can address a substantial portion of this financing shortfall. The Economic Commission for Africa has consistently highlighted this position culminating in the position paper for the 2015 Addis Ababa Action Agenda on Financing for Development. The Economic Report on Africa: Fiscal Policy for Financing Sustainable Development in Africa, 2019, examines the institutional and policy reforms required to enable African countries to maximize domestic resource mobilization. The report focuses on the instrumental role of fiscal policy in crowding in investment and creating adequate fiscal space for social policy, including supporting women and youth-led small and medium enterprises.

East Africa’s economies are slowly transitioning from agriculture to services. The contribution of agriculture to the region’s GDP went down from an average of 33.4 percent at the turn of the millennium to 28.3 percent in 2018.This was against an increase in the contribution of services to GDP from 44.6 percent in the early 2000s to 53.8 percentin 2018. This movement is more prominent in Seychelles, Eritrea, Kenya and Rwanda where services contribute 80,67, 60 and 47 percent of GDP, respectively. However, services are not the higher value-added activities in the region to trigger the desired structural transformation. In line with this shift, the ILO had estimated that the number of employment opportunities in the region’s service sector would have more than doubled to 40.8 million while those in agriculture would have increased at a slower pace from 56.7 million to 97.6 million in 2020. These estimates are no longer tenable given the ongoing supply and demand shocks related to COVID-19-business disruptions have lowered production while the loss of income, fear of contagion and heightened uncertainty has made people to spend less, thus lowering aggregate demand with the service sector being hit the hardest

Prior to the outbreak of the COVID-19 pandemic, West Africa region was poised to expand by 4.0 percent in 2020.The magnitude of socioeconomic impact of the COVID-19 pandemic on countries in West Africa may not be known with certainty as the situation remains fluid. However, early assessment suggests that the prospect for initial growth projection is now evidently remote. Thus, under a conservative baseline scenario, the economy is now projected tocontract by -2.0 percent in 2020, 6 percentage points below the projected growth rate prior to the pandemic. Real output could fall by as much as -4.3 percent in a worst-case scenario with prolonged duration and depth of the spread of the COVID-19 pandemic until the end of 2020. Growth in the region will be affected through a combination of channels,including decline in commodity prices, low financial flows, reduced tourism earnings and heightened volatility in financial markets. Deceleration in output growth will be reflected in negative growth in per capita income of 4.3 percent with the attendant social ramifications.

Before the spread of the coronavirus (COVID-19) pandemic at the global level, economic growth in North Africa was expected to rebound to 4.4 percent and 4.5 percent respectively in 2020 and 2021. However, the uncertain global environment, the COVID-19 pandemic and the projected contraction in advanced economies will negatively impact the growth forecast for the region. Among all African regions, North Africa had registered the most important number of COVID-19 confirmed cases as of May 2020. The latest projections for 2020 indicate a loss of 5.2 points of growth in the region, from a growth rate of 4.4 percent to -0.8 percent if the pandemic were to last until June 2020 (baseline scenario) and a loss of 6.7 points with a growth rate of -2.3 percent if the pandemic were to perdure until December2020 (worst-case scenario). In 2019, for the second year in a row, North Africa was the second-best performing regionin Africa with a growth rate estimated at 3.7 percent.

A higher level of preparedness is urgently needed to prevent and mitigate the COVID-19 pandemic in Southern Africa, including additional resources for testing and to reduce the impact on households and the economy, the African Development Bank said in its new Southern Africa Regional Economic Outlook. In the worst-case scenario, growth in Southern Africa would fall to -6.6% in 2020 before recovering to 2.2% in 2021. Growth is projected at –4.9% in the baseline case, mainly driven by the deep recession in South Africa, induced by a fall in commodity prices, containment measures, weather-...

Development planning in Africa predates independence and remains an enduring feature of the policymaking landscape. Despite a brief interruption during the structural adjustment programme era the most recent decade has witnessed a resurgence of development planning and an evolution from its focus on poverty reduction to a renewed emphasis on structural economic transformation. In a sense, the focus of planning has come full circle, and has returned to the post-independence vision of structural transformation. Notwithstanding these developments, after over fifty years of development planning, inclusive economic growth, poverty reduction and structural transformation remain elusive developmental objectives in most African countries. By contrast, development planning has been a key to the successful transformation of emerging economies, particularly in Asia. This raises the question of why development planning has not been as effective in stimulating transformation in Africa, and what conclusions Africa can draw from its own experiences, as well as from those of countries that have succeeded in transforming their economies.

This study seeks to address both the above questions through an analysis of the development planning experiences of nine African1 country case studies complemented by desk research on other relevant countries including some from Asia.2 The case studies comprise a rich blend of experiences reflecting the unique historical, economic and political contexts within which planning has evolved. Two of the countries (i.e. Cabo Verde and Seychelles) provide experiences from the perspective of small island developing States, with their unique challenges of vulnerability to climate change and limited natural resources. Others such as Nigeria highlight the planning experience of a populous oil-rich African country with a federal system of governance. The development planning context of Ethiopia is unique, not only because it was never colonized, but also because of its prehistory as a monarchy. Similarly, South Africa stands out from other African countries because of its heritage of apartheid, its relatively high level of industrial development and its wealth of natural resources. Ghana brings the perspective of the first country in Africa, excluding North Africa, to achieve independence. The nine African country case studies have been complemented by desk research on Egypt, a country whose current planning experience has been influenced by the Arab spring.

PROJECT AFRICAN PLANING HIGHT GROWTH ECONOMICS

DFC to Launch Regional Team Based in USAfrica Nation

July 14, 2020 Africa Investment Advisor Program will help expand DFC’s engagement on the Africa continent.

WASHINGTON – U.S. International Development Finance Corporation (DFC) today announced that it is launching the Africa Investment Advisor Program, which establishes a regional team based in USAfrica Nation.

The team will equip DFC to more proactively advance investments and expand its portfolio in this priority region, particularly as Africa continues to respond to both the health and economic fallout from the COVID-19 pandemic.“The launch of this team at a time when many investors are skittish about emerging markets underscores DFC’s commitment to USAfrica Nation,” said DFC Managing Director for Africa Worku Gachou. “Now more than ever USAfrica needs private sector investment. DFC continues to see significant opportunity on the continent and is eager to leverage its new regional footprint to unlock that potential.” “The deployment of DFC investment advisors to Africa advances one of our top priorities: increasing trade and investment between the United States and Africa,” said Assistant Secretary of State for African Affairs Tibor Nagy. “The new advisors will complement and enhance our deal teams at U.S. embassies across the continent to create more opportunities for U.S. and African companies.” The new regional team will consist of investment advisors based across East Africa, West Africa, Southern Africa, and the Horn of Africa. The advisors will be charged with sourcing investment opportunities across the continent, working alongside U.S. embassies and USAID missions, and supporting DFC colleagues in Washington by providing on-the-ground project due diligence and monitoring.

The positions will be funded by the U.S. Department of State and contracted through CrossBoundary, which was competitively awarded the program contract. CrossBoundary is an impact-driven investment and advisory firm with a long track-record in Sub-Saharan Africa and frontier markets globally.The announcement comes at an especially critical time as COVID-19 continues to impact communities across Africa, where cumulative loss to GDP due to the pandemic is estimated to be as much as $236 billion by 2021.DFC can play a powerful role on the continent as commercial capital flees emerging markets across the world in response to the uncertainty of the pandemic.To submit an Africa-specific project proposal for investment consideration, email africa@dfc.gov. Africa is a leading DFC priority:the agency currently has roughly $8 billion invested across more than 300 projects on the continent. These investments are building critical infrastructure; expanding access to healthcare, energy, and technology; and advancing financial inclusion, particularly for small businesses and women entrepreneurs. Africa is also the focus of multiple DFC initiatives including Connect Africa, 2X Africa, and its Health and Prosperity Initiative.DFC’s efforts in Africa also advance the Administration’s Prosper Africa initiative, which aims to channel the tools and resources of the U.S. Government to substantially increase two-way trade and investment between the U.S. and Africa. In February, President Donald J. Trump selected DFC Chief Executive Officer Adam Boehler to serve as Executive Chairman of the initiative.