Economic Commission for Africa

2010 Dialogue with the UNGA Second Committee

Growth with Equity: The African Regional Growth with Equity: The African Regional ExperienceExperience

Abdoulie Janneh, USG & Executive Secretary of the Economic Commission for Africa

2010 Dialogue with the UNGA Second Committee

Outline

Introduction

Africa’s Growth Performance

Importance of Equity

Growth and Equity in Africa

Responses and Way Forward

2010 Dialogue with the UNGA Second Committee

Introduction

expansion in economic activity dual challenge of having to achieve growth while

ensuring that it is equitable growth is not a given fact of economic life

exchange views on key issues in global economic development

Objectivesgain insights and share

regional perspectives

Compelling !Compelling !Theme: ‘Growth with Equity’‘Growth with Equity’

2010 Dialogue with the UNGA Second Committee

Africa’s Growth Performance growth rate of per capita GDP barely higher

than population growth rate (between 1980 and 2000)

real GDP per head fell by 42.5% (between the 1980s and 1990s) “Africa’s lost decades”

Africa’s GDP expanded by nearly 6% per annum (beginning of the new Millennium)

African economies shown resilience during the current crisis growing by about 2% in 2009 (growth is expected to average over 5% per annum this year and the next)

growth performance driven by commodity exports and services

AFRICA

2010 Dialogue with the UNGA Second Committee

Importance of Equity (1/2)

Self-limiting, costly, societal tensions

No account of the external & inter-temporal dimensions

Growth not backed by internally generated demand

Example:Example: export oriented economies to domestic stimulus packages

Argument: “if the growth rate is sufficient

it will trickle down from the well-to-do to other segments of society”

Difficulty

2010 Dialogue with the UNGA Second Committee

Importance of Equity (2/2)

Inequitable growth is costly

Real and perceived inequalities

Equity has international & inter-temporal dimensions

2010 Dialogue with the UNGA Second Committee

Growth and Equity in Africa (1/3)

Described as ‘JOBLESS’Africa’s growth performance

Key elementPromoting

equityEmployment

Current unemployment

rates

0

5

10

15

20

25

%

South AfricaNigeriaEgypt

Share of unemployed Youth (2007)

0102030405060708090

%

ZimbabweUgandaBurkina Faso

2010 Dialogue with the UNGA Second Committee

Growth and Equity in Africa (2/3)

Growth with limited equity in Africa skewed distribution of economic opportunities

Sustainable economic growth in Africa backed by regional integration, adequate finance and diversified production structures

low incomes and poorer outcomes in the labour market

lower educational attainment rates

poor health status

under-representation in political & policymaking processes at various levels

overall exclusion of marginalized

and vulnerable groups

2010 Dialogue with the UNGA Second Committee

Growth and Equity in Africa (3/3)

Importance of the topic ECA’s Economic Report on Africa in 2003 and 2010 focused on employment

Findings the relatively strong GDP growth did not translate into meaningful employment creation and reduction of poverty and inequality

Because: investments were mainly in the traditional capital

intensive extractive sector

agriculture accounts for a significant share of employment in most African countries characterized by low productivity growth did not provide enough employment and decent incomes

2010 Dialogue with the UNGA Second Committee

Levels of gender equality in employmentEmployment Share of paid employees, own-account

workers and employers in total employment

0 10 20 30 40 50 60 70 80

Benin

Burkina Faso

Cameroon

Egypt

Ethiopia

Ghana

Madagascar

Mozambique

South Africa

Tanzania

Tunisia

Share of Total (%)

M

F

Source: African Women’s Report 2009

2010 Dialogue with the UNGA Second Committee

Responses and Way Forward (1/3)

Example: Algeria Ambitious public spending programmes (in the 2000s)

boosting domestic demand; generating jobs through public investment in infrastructure; support to agricultural production and SMEs

total and youth unemployment rates declined markedly

Promote high-level sustainable economic growth with strong employment generation requires transformation of the structure of African economies

Key instrument to address equity concerns in Africa

Public spending

2010 Dialogue with the UNGA Second Committee

Responses and Way Forward (2/3)

Example: Republic of Congo economic growth reached 7.1% in 2009

Employment situation not optimal much of the growth in the oil sector (70% of GDP but employs only 1% of the population)

Important to increase productivity and incomes

Requires both investments in infrastructure and human capital

Providing incentives for private sector employment

To achieve growth with equity in Africa

2010 Dialogue with the UNGA Second Committee

Responses and Way Forward (3/3)

Example: Tunisia Social Welfare Policy (free education and

increased women’s participation in the labour market) helped to reduce the poverty rate from 7.7% in 1985 to 3.8% in 2005

The implementation of social protection schemes requires financing

With Africa’s combined consumer spending of $860 billion in 2008 and combined reserves of $470 billion at the end of 2009 scope for increased domestic resource mobilization

Partnerships especially in the nature of technical assistance will also make a useful contribution

Economic Commission for Africa

Thank you for your attention !Thank you for your attention !

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