Economic Commission for Africa Growth with Equity: The African Regional Experience 2010 Dialogue with the UNGA Second Committee Growth with Equity: The African Regional Experience Abdoulie Janneh, USG & Executive Secretary of the Economic Commission for Africa

2010 Dialogue with the UNGA Second Committee Outline  Introduction  Africa’s Growth Performance  Importance of Equity  Growth and Equity in Africa  Responses and Way Forward  Introduction  Africa’s Growth Performance  Importance of Equity  Growth and Equity in Africa  Responses and Way Forward

2010 Dialogue with the UNGA Second Committee Introduction expansion in economic activity dual challenge of having to achieve growth while ensuring that it is equitable growth is not a given fact of economic life expansion in economic activity dual challenge of having to achieve growth while ensuring that it is equitable growth is not a given fact of economic life exchange views on key issues in global economic development Objectives gain insights and share regional perspectives Compelling ! ‘Growth with Equity’ Theme: ‘Growth with Equity’

2010 Dialogue with the UNGA Second Committee Africa’s Growth Performance growth rate of per capita GDP barely higher than population growth rate (between 1980 and 2000) real GDP per head fell by 42.5% (between the 1980s and 1990s)  “Africa’s lost decades” Africa’s GDP expanded by nearly 6% per annum (beginning of the new Millennium) African economies shown resilience during the current crisis growing by about 2% in 2009 (growth is expected to average over 5% per annum this year and the next) growth performance driven by commodity exports and services growth rate of per capita GDP barely higher than population growth rate (between 1980 and 2000) real GDP per head fell by 42.5% (between the 1980s and 1990s)  “Africa’s lost decades” Africa’s GDP expanded by nearly 6% per annum (beginning of the new Millennium) African economies shown resilience during the current crisis growing by about 2% in 2009 (growth is expected to average over 5% per annum this year and the next) growth performance driven by commodity exports and services AFRICA

2010 Dialogue with the UNGA Second Committee Importance of Equity (1/2) Self-limiting, costly, societal tensions No account of the external & inter-temporal dimensions Growth not backed by internally generated demand Example: Example: export oriented economies to domestic stimulus packages Argument: “if the growth rate is sufficient it will trickle down from the well-to-do to other segments of society” Difficulty

2010 Dialogue with the UNGA Second Committee Importance of Equity (2/2) Inequitable growth is costly Real and perceived inequalities Equity has international & inter-temporal dimensions

2010 Dialogue with the UNGA Second Committee Growth and Equity in Africa (1/3) Described as ‘JOBLESS’ Africa’s growth performance Key element Promoting equity Employment Current unemployment rates Share of unemployed Youth (2007)

2010 Dialogue with the UNGA Second Committee Growth and Equity in Africa (2/3) Growth with limited equity in Africa  skewed distribution of economic opportunities Sustainable economic growth in Africa  backed by regional integration, adequate finance and diversified production structures Growth with limited equity in Africa  skewed distribution of economic opportunities Sustainable economic growth in Africa  backed by regional integration, adequate finance and diversified production structures low incomes and poorer outcomes in the labour market lower educational attainment rates poor health status under-representation in political & policymaking processes at various levels overall exclusion of marginalized and vulnerable groups

2010 Dialogue with the UNGA Second Committee Growth and Equity in Africa (3/3) Importance of the topic  ECA’s Economic Report on Africa in 2003 and 2010 focused on employment Findings  the relatively strong GDP growth did not translate into meaningful employment creation and reduction of poverty and inequality Because: investments were mainly in the traditional capital intensive extractive sector agriculture  accounts for a significant share of employment in most African countries  characterized by low productivity growth  did not provide enough employment and decent incomes Importance of the topic  ECA’s Economic Report on Africa in 2003 and 2010 focused on employment Findings  the relatively strong GDP growth did not translate into meaningful employment creation and reduction of poverty and inequality Because: investments were mainly in the traditional capital intensive extractive sector agriculture  accounts for a significant share of employment in most African countries  characterized by low productivity growth  did not provide enough employment and decent incomes

2010 Dialogue with the UNGA Second Committee Levels of gender equality in employment Source: African Women’s Report 2009

2010 Dialogue with the UNGA Second Committee Responses and Way Forward (1/3) Example: Algeria Ambitious public spending programmes (in the 2000s)  boosting domestic demand; generating jobs through public investment in infrastructure; support to agricultural production and SMEs  total and youth unemployment rates declined markedly Promote high-level sustainable economic growth with strong employment generation  requires transformation of the structure of African economies Example: Algeria Ambitious public spending programmes (in the 2000s)  boosting domestic demand; generating jobs through public investment in infrastructure; support to agricultural production and SMEs  total and youth unemployment rates declined markedly Promote high-level sustainable economic growth with strong employment generation  requires transformation of the structure of African economies Key instrument to address equity concerns in Africa Public spending

2010 Dialogue with the UNGA Second Committee Responses and Way Forward (2/3) Example: Republic of Congo  economic growth reached 7.1% in 2009 Employment situation not optimal  much of the growth in the oil sector (70% of GDP but employs only 1% of the population) Example: Republic of Congo  economic growth reached 7.1% in 2009 Employment situation not optimal  much of the growth in the oil sector (70% of GDP but employs only 1% of the population) Important to increase productivity and incomes Requires both investments in infrastructure and human capital Providing incentives for private sector employment To achieve growth with equity in Africa

2010 Dialogue with the UNGA Second Committee Responses and Way Forward (3/3) Example: Tunisia Social Welfare Policy (free education and increased women’s participation in the labour market)  helped to reduce the poverty rate from 7.7% in 1985 to 3.8% in 2005 The implementation of social protection schemes requires financing With Africa’s combined consumer spending of $860 billion in 2008 and combined reserves of $470 billion at the end of 2009  scope for increased domestic resource mobilization Partnerships especially in the nature of technical assistance will also make a useful contribution Example: Tunisia Social Welfare Policy (free education and increased women’s participation in the labour market)  helped to reduce the poverty rate from 7.7% in 1985 to 3.8% in 2005 The implementation of social protection schemes requires financing With Africa’s combined consumer spending of $860 billion in 2008 and combined reserves of $470 billion at the end of 2009  scope for increased domestic resource mobilization Partnerships especially in the nature of technical assistance will also make a useful contribution

Economic Commission for Africa Thank you for your attention !