1. Africa’s growthprospects do appear favourable in the medium-term drivenby continued prudent macroeconomic management and strong domestic demand,underpinned by increasing public and private investment especially ininfrastructure in most countries.
Growth isexpected to reach 3.6% in 2018 and 3.8% in 2019. 2.
However,slow growth recovery in advanced and emerging economies and tightening offinancial markets in the developed economies may continue to negatively affectexport demand and curtail FDI inflows to Africa. Publicdebt levels are sustainable, but remain high, calling for the need to investfunds borrowed into productive sectors to generate returns that could allowtimely repayment and enhance the countries’ growth prospects. Some countriesmay also face problems in repaying their debts as they are caught in anenvironment of low growth prospects, widened fiscal deficits, weakercurrencies, and lower export revenues. 3. Given the above currenteconomic outlook on the continent, promoting industrialization in Africa shouldcontinue to meet the requirements of private businesses, in particular, SMEsthat are the backbone of the private sector across the continent. The continentundoubtedly needs to promote “Made in Africa” in which the private sector, inparticular SMEs, has a crucial role to play.
4. Africa’s industrialpolicies should be coherent with other policies including trade policies topromote value addition and economic diversification. These policies couldinclude ‘smart protectionism’, of which nascent industrial sectors can developproductivity through learning-by-doing, technology upgrade, support fromleading firms and reducing tariffs on imported inputs to industrial sectors, aswell as reducing barriers to imports of services that are inputs to theindustrial sector. The industrial policies should also pay attention todeveloping producer services, such as design, marketing and branding thatpromote the “Made in Africa”. 5. Mobilizing finance tosupport the private sector in Africa cannot be overstated.
Promoting financialmarkets development, that harnesses domestic resources for long-termdevelopment, is accessible in an inclusive way to the range of economic actorswould be a significant contribution to improving the capacity of Africa’sprivate sector to participate in Africa’s industrialization and value chainsdevelopment. At the regional and continental levels, harnessing cross-borderfinancial flows from Africa’s Diaspora that remains a consistent source ofexternal inflows could be crucial for the continent’s development. Initiatives toenhance the use of remittance channels, cutting the associated costs andmobilizing remittances for investment purposes, could help channel theDiaspora’s finance into industrialization process of African economies. 6. It is also important tostress that our continent will have to actively promote all viable means ofdomestic as well as foreign resource mobilization. This includes harnessingexcess liquidity at banking sector for development (particularly in long- termdevelopment projects), stemming illicit financial flows out of Africa, tacklingtax evasion, and challenging transfer mispricing.