Dawn of a new eraEconomic transformation for African revival The sub-Saharan region''s “growth miracle” of the early 2000s has slumped in the past two years, with growth in 2016 projected at just 1.6%. Economic transformation can revive Africa''s growth rates while promoting development and climate goals, according to a new report from the New Climate Economy.The report, Africa''s New Climate Economy, is the first to bring economic transformation together with development and climate change in one comprehensive assessment.
In an effective economic transformation, productivity is boosted within sectors and there is some shift of workers from low-productivity sectors like agriculture to high-productivity sectors like industry and services. Sub-Saharan Africa is still at an early stage, with around 60% of employment in agriculture and only 5% in manufacturing, so the potential is enormous.
The region''s “growth miracle” of the early 2000s has slumped in the past two years, with growth in 2016 projected at just 1.6%. Recent progress in reducing poverty is at risk, especially considering Africa is expected to be the region worst affected by climate change, with a median loss in GDP of around 4%.
“The choices that African leaders make in the next few years will have major implications for economic growth, human well-being and climate resilience in the decades ahead,” said Ngozi Okonjo-Iweala, former finance minister of Nigeria and a member of the Global Commission on the Economy and Climate. “It''s encouraging to see these three priorities brought together.”
Initial indicators of economic transformation are positive.
By one estimate, it has already added about 1% to productivity growth across the region since 2000, rising as high as 4% for Rwanda, and 2-3% for Nigeria, Tanzania and Uganda.
“Across multiple sectors,
economic, social, and environmental transformations can reinforce each other and create numerous virtuous circles,” says Milan Brahmbhatt, lead author of the report. “Many of the policy and institutional reforms needed to boost growth and reduce poverty over the next 15 years will also contribute to better management of climate risk.”
NEW CLIMATE ECONOMY