Africa’s current vision for Economic Structural transformation UNECA: Africa CSO Policy Dialogue Structural Economic Transformation in the context of the AU Vision 63 and the UN’s Sustainable Development Goals: What does equitable and sustainable economic transformation look like in Africa?” Addis Ababa, 10-11 March 2016 Dereje Alemayehu Senior Economic Policy Advisor Tax Justice Network-Africa 1 1

From optimism to pessimism to optimism: 1. Africa: the road from Structural Adjustment to Structural Transformation Post-independence industrialisation ambition – internal & external causes for its failure & consequences Structural Adjustment Programmes – Deregulation; Liberalisation & Privatisation and their consequences The new Slogan: “No to structural adjustment - Africa needs structural transformation From optimism to pessimism to optimism: Are internal blockages overcome? Is the international context enabling or disabling?

2. Why structural transformation? What is Structural Transformation? “Structural transformation occurs when labour moves from low to high productivity sectors; this involves both overall productivity gain in the economy & reduction of inter-sectoral productivity gap” Why does Africa need Structural Transformation: “African countries have long depended heavily on the production and export of primary commodities with little value addition, which has led to lack of economic diversification and few forward and backward linkages to other sectors of the economy”

3. How is structural Transformation to be achieved Promoting good political and economic governance Promoting technology transfer and innovation for value addition and structural transformation; Reversing underinvestment in infrastructure Boosting productivity in agriculture Accelerating regional integration and intra-African trade Harnessing new development partnerships through strategic engagement Mobilising resources for structural transformation Mobilising domestic and foreign savings through the financial system Effective use of windfall from commodity booms and newly available resources “strategic bargaining” with investors and development partners

4. Role of Institutions in the transformation process – states & markets Looking at it not “governance requirements” tick-box but as an issue of building state capabilities: technocratic & bureaucratic capabilities and quality of national leadership in shaping the role of the state and market political capabilities: National support for national development; accountability, voice and participation of citizens in policy and implementation processes Capabilities to defend national development interests & aspirations in international context Capabilities to manage the market - not as ad hoc or corrective measure but as a central development issue

5. Transformation and equitable social development “inclusive development” not limited to “job creation” or “growth with jobs”; “first development and then equity” “sequencing is discarded; Addressing intersectional inequality as a means and an end of sustainable development - not as a “welfare” package to mitigate “unintended consequences” of economic growth

6. The role/fate of small holder agriculture in the transformation process “boosting productivity” in agriculture is stated as “transformation goal”. However, its compatibility with environmental and climate resilient growth & its the implications on women’’ labour – need further elaboration, No clarity on what policy measures and institutions are required for inclusive agriculture-driven transformation

7: Low carbon transformation In principle, development in a constrained world: climate change adaptation imperatives are broadly outlined; However How the transformation process could be put on a low carbon pathway to ensure sustainable development needs further discussion and deepening to translate into concrete development policies

8: Financing transformation illicit financial flows issue and some forms of tax dodging & resource leakages addressed However, elements of fiscal and industrial policy to propel “dynamic accumulation” not adequately treated