As Africa grapples with increasing challenges, such as the devastating effects of climate change, experts are calling for urgent action to secure the continent’s economic future.
As Africa grapples with increasing challenges such as the devastating effects of climate change, rising debt levels, systemic inequalities, and an imbalanced global financial system, experts are calling for urgent action to secure the continent’s economic future.
At the 2024 Africa Economic Conference, titled “Securing Africa’s Economic Future in an Increasingly Uncertain Environment,” United Nations Economic Commission for Africa (UNECA) Executive Secretary Claver Gatete presented a series of five interconnected solutions aimed at addressing these crises and guiding Africa towards economic transformation.
Climate Crisis and Economic Losses
Africa is facing serious economic consequences from climate change. Estimated annual losses from climate disasters range from $290 billion to $440 billion, threatening the continent’s future sustainability. Additionally, the financing gap required to achieve the United Nations’ Sustainable Development Goals (SDGs) for Africa has risen to a staggering $1.3 trillion annually.
Gatete emphasized, “The need for urgent action has never been clearer. If we want to turn these challenges into opportunities, now is the time to act.”
Proposed Solutions for Economic Growth
Value Addition: The Key to Economic Diversification
Despite its abundant natural resources, Africa continues to underperform in industrial production, remaining heavily dependent on imports of goods derived from its raw materials. Gatete argues that Africa’s future lies in transforming these raw materials into value-added products and promoting regional value chains to stimulate economic growth.
Pointing to successful examples such as Botswana’s beef industry, Ethiopia’s leather production, and the cocoa industries in Ghana and Côte d’Ivoire, he called for scaling these models across the continent. “Unlocking Africa’s renewable energy potential and building solid value chains can help create jobs and position the continent as a key global economic player,” he said.
Attracting Private Investment
Gatete highlighted the importance of attracting private investment to move beyond reliance on foreign aid. This can be achieved by reducing investment risks through improved governance, transparency, and innovative financial mechanisms. He cited Rwanda’s vaccine production initiative as an example of how local value creation can attract international partnerships.
“Africa must replicate such success stories in other sectors,” he warned.
Increasing Intra-African Trade
Another key step in Africa’s economic integration is the accelerated implementation of the African Continental Free Trade Area (AfCFTA). Gatete stressed that true regional integration cannot happen without the free movement of goods, services, and people. Governments must work together to eliminate trade barriers and promote stronger intra-African cooperation.
Reforming Global Financial Systems
The UNECA Executive Secretary also called for a complete overhaul of the global financial system, which systematically excludes Africa from key decision-making processes. He argued that Africa’s interests, particularly in financing SDGs, climate adaptation, and equitable growth, should be prioritized.
Gatete also suggested increasing local resource mobilization and introducing innovative financial instruments such as green bonds, blue bonds, and sustainability-linked bonds to strengthen Africa’s financial resilience and sovereignty.
Restructuring Tax Systems
Africa’s tax-to-GDP ratio remains well below the global average at just 15.6%. Gatete proposed modernizing tax systems, expanding the tax base to include the informal sector, and using digital technologies to improve tax collection efficiency. “By increasing tax revenue, even by a small margin, Africa can generate billions of dollars in much-needed funds,” he stated.
Urgent Call to Action
As Africa’s economic challenges continue to rise, the continent’s leaders must act decisively to create a more sustainable and resilient economic future. Gatete’s proposed solutions represent a comprehensive approach to addressing Africa’s urgent issues, but he warned that rapid and coordinated efforts will be needed to avoid further setbacks.
“Africa’s transformative potential is immense,” he concluded. “But to unlock its full potential, we must confront these challenges head-on.”
