To Avert a “Lost Decade,” Africa Must Urgently Achieve Stability, Increase Growth, and Create Jobs

WASHINGTON, October 4, 2023 — Sub-Saharan Africa’s economic outlook remains bleak amid an elusive growth recovery. According to the latest World Bank Africa’s Pulse report, rising instability, weak growth in the region’s largest economies, and lingering uncertainty in the global economy are dragging down growth prospects in the region.

 

Economic growth in Sub-Saharan Africa is forecast to decelerate to 2.5% in 2023, from 3.6% in 2022. South Africa’s GDP is expected to only grow by 0.5% in 2023 as energy and transportation bottlenecks continue to bite. Nigeria and Angola are projected to grow at 2.9% and 1.3%, respectively, due to lower international prices and currency pressures affecting oil and non-oil activity. Increased conflict and violence in the region weigh on economic activity, and this rising fragility may be exacerbated by climatic shocks. In Sudan, economic activity is expected to contract by 12% because of the internal conflict halting production, destroying human capital, and crippling state capacity. 

 

In per capita terms, growth in Sub-Saharan Africa has not increased since 2015. In fact, the region is projected to contract at an annual average rate per capita of 0.1% over 2015-2025, thus potentially marking a lost decade of growth in the aftermath of the 2014-15 plunge in commodity prices.

 

“The region’s poorest and most vulnerable people continue to bear the economic brunt of this slowdown, as weak growth translates into slow poverty reduction and poor job growth,” said Andrew Dabalen, World Bank Chief Economist for Africa. “With up to 12 million young Africans entering the labor market across the region each year, it has never been more urgent for policymakers to transform their economies and deliver growth to people through better jobs.”

 

Despite the gloomy outlook, there are few bright spots. Inflation is expected to decline from 9.3% in 2022 to 7.3% in 2023 and fiscal balances are improving in African countries that are pursuing prudent and coordinated macroeconomic policies. In 2023, the Eastern African community (EAC) is expected to grow by 4.9% while the West African Economic and Monetary Union (WAEMU) is set to growth by 5.1%. However, debt distress remains widespread with 21 countries at high risk of external debt distress or in debt distress as of June 2023.

 

Overall, current growth rates in the region are inadequate to create enough high-quality jobs to meet increases in the working-age population. Current growth patterns generate only 3 million formal jobs annually, thus leaving many young people underemployed and engaged in casual, piecemeal, and unstable work that does not make full use of their skills. Creating job opportunities for the youth will drive inclusive growth and turn the continent’s demographic wealth into an economic dividend.

 

“The urgency of the jobs challenge in Sub-Saharan Africa is underscored by the huge opportunity from demographic transitions that we have seen in other regions,” said Nicholas Woolley, World Bank Economist and contributor to the report. “This will require an ecosystem that facilitates private-sector development and firm growth, as well as skill development that matches business demand.”

 

The development of labor-intensive manufacturing seems to be missing in Africa, limiting further effects for the indirect job creation in support services and international trade. This may be partly due to a lack of capital, which continues to hamper the structural transformation required for good quality jobs: while the region contributes 12% of the global working age population, Sub-Saharan Africa owns only 2% of the global capital stock. This means people have fewer assets with which to be productive in Sub-Saharan Africa, compared to other regions.

 

The report identifies a set of policies to overcome hurdles and unleash job creation in Sub-Saharan Africa, including:

 

    Cost-effective private sector reforms, focused on increasing competition, uniform policy enforcement across firm sizes, and regulatory alignment with regional trading partners. Governments can also help identify and support early-stage growth businesses through more inclusive procurement practices and promotion of local businesses abroad.

    Investment in education is necessary to boost semi-skilled occupations for the region.  Interventions that improve learning in school are more effective than those increasing school attendance alone, while vocational education can be useful for addressing the underemployed and those who have missed out on education as children.

    Education of girls and access to jobs for women can reduce potential productivity loss from the misallocation of female labor. Cash transfers have proven effective in increasing girls' school enrollment and attendance, as well as in curbing pregnancies among school-age girls.

 

 Contacts:

In Washington:

Daniella van Leggelo-Padilla, (202) 473-4989, dvanleggelo@worldbank.org

Caitlin Berczik, 202-458-935, cberczik@worldbankgroup.org

For more information on World Bank programs in Africa, go to: https://www.worldbank.org/en/region/afr

IFAD picks next president to lead response to the global food crisis

 

Rome, 7 July 2022: The International Fund for Agricultural Development (IFAD) today appointed its top finance executive, Alvaro Lario, to be its next president, choosing a champion of private sector investments to lead the UN agency into battle against a global food security crisis triggered by war in Ukraine, climate change and the economic shock of COVID-19.

Lario, IFAD’s Chief Financial Officer (CFO) and an Associate Vice-President for financial operations since 2018, pledged to double IFAD’s impact on rural poor communities by 2030.

“We have the institutions to tackle poverty, we have the know-how to reduce inequality, what we need is to mobilise resources and join forces,” he told delegates from 177 member states attending the election held at IFAD’s Rome-based headquarters.

“We know that ODA (Official Development Assistance) and ODA of agriculture will not be enough. Due to the war in Ukraine small-scale producers globally are suffering the current disruptions of food systems. This is one additional shock on top of the climate disasters and unequal recovery from COVID-19, and poor communities are disproportionally affected,” he added.

Lario committed to scale-up investments in climate resilience and climate-smart agriculture. “Climate-smart agriculture and climate adaptation will become increasingly important to break the cycle of poverty, inequality, conflict and forced migration. IFAD needs to act urgently and partner with climate liked-minded institutions to support small scale producers and poor rural communities adapt to climate shocks,” said Lario.

Lario also stressed that “it will not be possible to reach the SDGs without harnessing the power of women and the energy of the youth.” He promised to prioritize programmes that put women at the centre.

As IFAD CFO, Lario has led IFAD’s charge to mobilize private sector engagement in its battle against hunger and poverty, and on behalf of the world’s poorest rural communities.

 

“As IFAD President, I will ensure that IFAD connects the huge amount of global savings from impact investors and pension funds to tackle poverty in rural poor communities. We need to make sure that we use our AA+ credit rating to mobilize more funds. This is a unique competitive advantage in the UN system,” said Lario.

Under his stewardship, IFAD became the first United Nations Fund and the only UN body and specialized agency other than the World Bank Group to enter the capital markets and obtain a credit rating, enabling the Fund to expand resources mobilization efforts to the private sector. Lario has 20 years of experience in the private sector, academia and international financial institutions, including developing local capital markets and investments in emerging markets at the International Financial Corporation of the World Bank group.

 

Lario will take up the IFAD helm amid mounting challenges in agriculture and notably for smallholders who are both key to global food security and extremely vulnerable to shocks. Rising global food, energy and fertilizer prices linked to the war in Ukraine now threaten to trigger a global food crisis and push millions more rural people into hunger and poverty.

IFAD’s role in building resilience among small-scale farmers who produce a third of the world’s food have made it a leader in the drive for global food security. Recently the Fund launched its Crisis Response Initiative to ensure that small-scale farmers can meet their immediate needs for fertilisers, seeds and technology and ensure the next harvests in 22 priority countries affected by commodity price hikes.

 

New figures published yesterday by five UN agencies including IFAD showed the world falling further behind in efforts to end hunger and poverty in line with the 2030 Sustainable Development Goals. The State of Food Security and Nutrition report showed that hunger globally rose to as many as 828 million in 2021, an increase of about 150 million since the outbreak of the COVID-19 pandemic.

Lario will take office on 1 October and serve a four-year term. He succeeds Gilbert Houngbo who has led the organisation since 2017.

 

Reduced funding for Neglected Tropical Diseases could be devastating

Ochieng’ Ogodo

[NAIROBI] Reducing funding for the fight against Neglected Tropical Diseases (NTDs) in the wake of COVID could be devastating for people in low- and middle-income countries, says Médecins Sans Frontières (MSF).

These diseases that impact mostly the poor are often overlooked by policy makers, resulting in few resources being available to address them.

“For many of these diseases, there is no easy solution – diagnosis and treatment are difficult, expensive or not accessible for those in remote or underserved areas, or simply do not exist” says MSF.

According to the World Health Organisation, NTDs ─ also known as diseases of poverty ─ that encompass 17 bacterial, parasitic and viral diseases affect more than one billion people worldwide and an estimated 40 per cent of impacted people live in the WHO African region.

The Center for Disease Control and Prevention says that NTDs  such as buruli ulcer, chagas disease, dengue fever, guinea worm disease, echinococcosis, human African trypanosomiasis and leishmaniasis are found in several countries in Africa, Asia, and Latin America.

NTDs often equal death or prolonged disability in the context of chronic poverty or humanitarian crises, such as population displacement, according to MSF. 

MSF is one of the few actors caring for people with NTDs in remote areas where resources are scarce and health systems are fragile.

“Over the last thirty years, MSF teams have treated hundreds of thousands of people with Chagas disease, visceral leishmaniasis, cutaneous leishmaniasis, and sleeping sickness (human African trypanosomiasis) – all parasitic NTDs which affect impoverished people living in very remote and underserved areas,” says MSF.

The international humanitarian medical non-governmental organisation of French origin not only helped identify new treatments and ways to diagnose people, but also played an active role in reducing the incidence of kala azar in Asia and sleeping sickness in Africa.

In recent years, MSF has also expanded care for people affected by snakebite envenoming, Noma and cutaneous leishmaniasis.  

It joined others today in today in signing the Kigali Declaration on Neglected Tropical Diseases (NTDs), a high-level, political declaration which aims to ensure that these diseases are eradicated, eliminated or controlled by 2030. At the same time, MSF

“MSF strongly endorses the Kigali Declaration on NTDs and commits to continuing our response to these diseases, particularly for people affected by leishmaniasis, snakebite, noma and sleeping sickness, through diagnosis and treatment in the humanitarian settings where we work,” said Daniela Garone, MSF’s International Medical Coordinator.

Important progress achieved towards controlling NTDs over the last decade has recently stalled due to the COVID pandemic as well as substantial aid cuts. Gains made in controlling the spread of diseases like visceral leishmaniasis are further in danger of disappearing largely due to major funding cuts by the UK government which was previously a key financial supporter of NTD programmes.

The Kigali Declaration on NTDs, an important initiative for ramping up the global response to NTDs by prioritizing disease control and supporting the new ambitious WHO NTD Roadmap, needs a broad support, according MSF.

The MSF also calls for the development of new and more user-friendly medical tools that can simplify NTD care and better integrate it into countries’ health programmes.

“It is imperative that the world’s primarily profit-driven Research and Development (R&D) model is overhauled in order to make sure that desperately needed innovations for NTDs do not continue to be deprioritized because they aren’t lucrative for pharmaceutical corporations,” it says.