- The global recession should spur African nations to shift towards greater industrial capacities, improved infrastructure and expanded ties with developing countries in and outside the continent, a senior analyst holds.
"Together with liberal market mechanisms, we need to build up states with strong institutions that can create enabling environments for business, economic growth, and economic recovery to take hold," advised Supachai Panitchpakdi, leader of the UN's trade agency UNCTAD, yesterday in Geneva.
"That will help Africa build up its resistance against crises that could recur," he told the UN Trade and Development Board's discussion of UNCTAD's activities in support of African development.
The global recession is bound to transform the world's trade and production patterns, opening a big door for Africa to start its industrialisation, it was understood. But African governments would have to "pave the way to create enabling circumstances" that could support industrialisation, job creation, and increased demand for more sophisticated goods as incomes rise," Mr Supachai added.
The UNCTAD leader noted that African economies enjoyed growth rates averaging some 6 percent annually from 2003 to 2008, but that had dropped to 1.2 percent during the global crisis in 2009.
At the same time, he noted that trade between African countries and other developing countries, known as "South-South" trade, held up fairly well during the crisis.
The Economic Report on Africa 2010, published in May by the UN Economic Commission for Africa (UNECA) and the African Union (AU), also noted that the current global economic crisis offers African governments an opportunity to lay the foundation for sustainable, employment-intensive economic growth.
"The recession should work as a wake-up call for Africa to deal with its vulnerabilities and introduce further reforms to promote growth, but more particularly employment creation to promote social development in the region," Rob Vos of the UN Department of Economic and Social Affairs (DESA), stated at the report's launch.
The report recommended massive investment in infrastructure and human capital, renewed efforts to mobilise domestic resources, market reforms, incentives to support private-sector employment and efforts to increase productivity and incomes in the informal sector.
It warned African countries against continuing to depend on traditional drivers of economic growth, such as exports of raw commodities, foreign investment and development aid, saying those sources of resources were too unpredictable to guarantee lasting growth.
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