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  • Matt Spencer

The economy of Africa

Africa’s agricultural, mining and energy resources could boost the continent’s economic growth and pave the way for a breakthrough in human development.

Africa’s economic outlook for 2013 and 2014 is promising, confirming its healthy resilience to internal and external shocks and its role as a growth pole in an ailing global economy. Africa’s economy is projected to grow by 5.3% this year.

Now is the time to step up the tempo of economic transformation, so that African economies become more competitive and create more gainful jobs.

Growth is not enough; African countries must provide the right conditions for turning natural resources into jobs optimize their resource revenues through smart taxation and help investors and locals to make the most of linkages.

The four Key elements that are needed to achieve that objective are as follows:

1-      African countries should create the right conditions for such a transformation to take place, including infrastructure, education and the creation of larger and more competitive markets. Access to markets is fundamental to structural transformation based on natural resources: regional integration and better access to the markets of large partners could open new opportunities for all.

2-      In the second instance, the primary sectors require sound land management, balanced and effective tax systems and the right mechanisms and incentives to cause an acceleration and diversification of the sources of growth.

3-      Governments and investors must ensure that a fair share of the proceeds from natural resources and extraction industries accrue to society: for example, they should be invested in people’s capacities to take up new jobs in promising sectors.

4-      Finally, the report suggests that African countries can foster change and economic diversification actively, for example through corridors of development around power, transport and communication lines. Stable and transparent use of budgets is key to achieving that goal.

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