The United Nations Resident and Humanitarian Coordinator in Nigeria Matthias Schmale has lamented that achieving the objectives of the Sustainable Development Goals (SDGs) in Africa is being hindered by a multiplicity of factors.
The UN Coordinator said this during a presentation of the 2023 Economic Report on Africa (ERA 2023) in Abuja recently. He noted that the convergence of many crises, such as the shocks generated by the consequences of the COVID-19 epidemic, the ripple effects of the Russian invasion of Ukraine, and climate change had resulted in Africa experiencing a setback or lack of progress in achieving the targets set by the SDGs.
Schmale, who was represented by the Economist in the Resident Coordinator’s Office, Nonso Obikili, cited an example of the impact of shocks on poverty, in 2021, when almost 30 million Africans experienced severe poverty, and the loss of 22 million employment occurred.
“The top ten countries with the highest number of poor people account for 64.7% of the continent’s poor population. The first four countries—Nigeria (100 million), the DR Congo (67 million), Tanzania (36 million) and Ethiopia (33 million)—account for 42% of the poor population,” Schmale said.
The report posited that achieving sustainable growth and building resilience in the African continent requires structural transformation, stressing that successful industrial policy requires both sectoral focus as well as getting the basics right.
The ERA 2023, which was launched on December 18, 2023, in Abuja was entitled “Building Africa’s Resilience to Global Economic Shocks”.
The report presented by the Director, Macroeconomics and Governance Division at the United Nations Economic Commission for Africa (UNECA), Adam Elhiraika, showed that the current global economic architecture affords opportunities for African countries to leapfrog and accelerate industrialization through careful experimentation of what has worked elsewhere and adapting it to local conditions.
The report added that it is essential for countries to identify optimal combinations of policy actions to nurture an industrial programme.
Elhiraika further explained that firm survival and growth in Africa were closely linked with exporting, working with international capital and international or global firms, adopting international managerial norms and standards as well as developing industrial clusters.
These elements, according to ERA 2023, come in different shades depending on the type of firms and their technology intensity. Broadly, however, three economic fundamental gaps require attention to get the basics right: skill gaps; infrastructure gaps and overall institutional quality gaps.
On promoting regional value chains, the report stated that countries can collaborate in creating, for example, regional agricultural commodity markets that will help to connect surplus economies with net importers for wheat, sugar and rice. This will reduce dependence on Russia and Ukraine.
“Financial integration could also protect the continent from the vicious cycle of debt distress and liquidity crunches through regional bond markets that would enhance savings mobilization, risk pooling and funding for regional and national infrastructure,” the report explained.
The ERA 2023 therefore called for new approaches for African countries to address challenges of global economic shocks. The report calls for improving risk management and building resilience strategies through well-designed national development plans and good governance, as well as structural transformation through equitable green growth and smart industrial strategies.
Special Adviser to the President on Economic Matters, Dr Tope Fasua, highlighted economic recessions that Nigeria had experienced in the past: Commodity price crashes of early 1970s after the oil boom in 1973; recession of the 1980s due to fall in commodity prices; and another crash in the mid-2000s due to crude oil crash.
“We live a life of volatility in terms of our finances, and most of Africa is still tethered to these kinds of risks,” he said.
At the launch were representatives of the United States Embassy, European Union, USAID, Federal Ministry of Budget and Economic Planning; Federal Ministry of Finance; Central Bank; and UN Agencies.
