ECONOMIC REPORT TASKS AFRICAN LEADERS ON JOB CREATION

By NBF News
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AFRICA'S economic recovering has been tied to the diversification of its productive base, creation of decent jobs and sustained against poverty.

The continent's leaders have been particularly charged to make job creation the pillar of their macroeconomic policies to achieve the Millennium Development Goals (MDGs).

These views are contained in the Economic Report on Africa 2010 released yesterday in Addis Ababa, Ethiopia by the United Nations Economic Commission for Africa (UNECA) in conjunction with the African Union (AU), just as the present state of energy supply in Nigeria has been described as a needless embarrassment.

The yearly report, published by UNECA and the AU Commission, a copy of which was made available to The Guardian is titled: 'Promoting high-level sustainable growth to reduce Unemployment in Africa.'

It said the current global economic crisis offers Africa the opportunity to lay the foundation for sustainable employment and high economic growth rate. The report also advocates structural transformation as the mechanism for achieving these aims.

'Africa's long-term growth prospects and ability to sustain high rate of employment generation and broader social development depend on success in economic diversification,' it said.

'For most people, gainful employment is the only way out of poverty. This is especially the case for youth and other disadvantaged groups. Unfortunately, unemployment and underemployment rates in Africa are high and continued to rise even during the period of rapid economic growth that came to an end with the global economic crisis in 2008.'

The report added that appropriate investment in infrastructure and human capital, renewed and creative efforts at domestic resource mobilisation, factor market reforms, incentives to support private-sector employment and efforts to increase productivity and incomes in the informal sector, are needed.

The document also highlights current trends in the global economy and their implications for African economies and how to use the challenges created by the recent global economic crisis to develop and implement policies that lead to the structural transformation of African economies. Special attention is paid to reducing unemployment among vulnerable groups.

Speaking with The Guardian yesterday after the launch of the report, the Director, Economic Development and New Partnership for Africa Development (NEPAD) division, Nigeria's Prof. Emmanuel Nnadozie, said the country has the resources more than any other African nation to guarantee steady power supply.

He said Nigeria might remain on the wrong end of this structural transformation, if something was not done immediately.

Nnadozie reiterated that if energy and other political challenges facing the country were not addressed, the country couldn't truly reclaim her proper position in the comity of nations and face the onerous task of home-grown development.

Nnadozie, who canvassed a constitutional assembly, said: 'Call it whatever name you like it, but I think Nigerians need to sit down and discuss how they want to live together. It is sad that when you go abroad, the world is beginning to ask you what part of the country you come from. Our level of nationalism is very low, when compared with a country like Ethiopia, where everyone sees himself first as an Ethiopian. We must decide whether we really want to practice true federalism or just make a pretence of it.'

The report said the Gross Domestic Product (GDP) growth in Africa declined from 4.9 per cent in 2008 to 2.4 per cent in 2009, but is expected to grow by 4.8 per cent in 2010.

Commodity prices, an important determinant of growth in many African economies, fell at the beginning of 2009, but have since rebounced and are expected to stabilise in 2010 and rise moderately in 2011. The rebound in 2009 was mainly due to increased petroleum prices, resulting in part from increased demand from China following its stimulus package as well as the upward revision of expected world demand.

However, as a result of the depreciation of the United States (U.S.) dollar, 2009 commodity prices were below their 2008 levels in real terms.

There were considerable regional variations in growth in 2009 across African regions and countries. Growth was highest in West Africa at 5.5 per cent, partly as a result of a boost in oil output in Nigeria, following the reduction in hostilities. East Africa also posted a healthy 4.3 per cent, much higher than the earlier estimate of 3.9 per cent. North Africa posted a GDP growth rate of 3.6 per cent. The worst hit region was Southern Africa where GDP declined by 1.1 per cent, followed by Central Africa with a paltry 1.8 per cent growth rate.

Another major challenge facing Africa is climate change. The report states that agricultural output is expected to decrease by 50 per cent in Africa, resulting in severe under-nourishment as a result of unchecked climate changes. The health burden and conflicts will increase as populations fight over dwindling resources.

The costs of adaptation and mitigation are, however, extremely high and beyond the means of African countries. It is estimated that the cost of adaptation could be anywhere between five and 10 per cent of continental GDP. It is therefore important for the international community to help in financing the cost.