While in April the IMF downgraded its GDP growth forecasts globally, reducing Africa’s by about 0.5 per cent per annum over the next five years, first deputy managing director David A. Lipton, pointed out that the right economic fundamentals are still in place.
Business executives from around the world are optimistic about Africa’s economic prospects, and argue that the current headwinds provide an opportunity for countries to diversify and step up investment in critical sectors such as agriculture and infrastructure to make them more resilient to external shocks.
“In fact, investment into Africa is rising despite the downturn,” said Tony O. Elumelu, founder of the Tony Elumelu Foundation and co-chair of the May 11-13 World Economic Forum Africa.
However, he underscored the need to set up investment in infrastructure as well as value addition to ensure that the money goes into the processing of raw materials — as opposed to simply extracting and exporting.
This was echoed by Fredrik Jejdling, president, sub-Saharan Africa Region, Ericsson, who pointed that the company has been in Africa for 120 years, which proves its commitment to the future of the continent.
However, Africa needs to address perceptions of risk on the continent and highlight the capability of its people and institutions to deliver complex projects, quality, local content and innovation.
South Africa’s Finance Minister Pravin Gordhan said that African countries need to mobilise their own resources and implement projects that will demonstrate Africans’ ability to deliver.
Mr Gordhan also underscored that Africa needs a “youth revolution” to create a different paradigm that will allow Africans to build more inclusive societies and improve the future of Africa.
“We can demonstrate to the world that we can create a more equal society than anywhere else,” he said.