Africa needs to achieve an annual gross domestic product (GDP) growth of seven per cent for three to four decades to achieve economic growth, the acting chief economist and vice-president for the Economic Governance and Knowledge Management Complex of the African Development Bank (AfDB), Professor Kevin Chika Urama, has said.
Urama, who made the statement today at the breakfast session of the 2022 AfDB annual meeting in Ghana, noted that Africa’s growth had been inconsistent over the years.
He said, “If you look at economic growth in all regions that have been able to reach that level, they did not just rise and fall. We keep on hearing about Africa rising, but some people have been cruising. How do we bring Africa to that level where we can have more than seven per cent growth annually for more than three, four decades so we can have a structural transformation that allows growth and development to happen?
“When we are doing this, we should also try to consider the improvements – inequality, poverty, structural transformation, and diversification of our economies. Some of these issues are songs we sing in every economic conference.”
The economist said that since 1960, Africa had been experiencing failed take-offs as a whole in their economic policies.
While Urama acknowledged that Africa did experience a five per cent GDP growth at some point, he noted that that period was shortlived. He stressed that the bank was concerned about how to break that circle and do things differently.
He said that Africa had failed in doing trade within its regions but chose to look outside for quick finance. He lamented that Africa traded within its region to the tune of only 15 per cent, compared to Europe and Asia, which recorded 67 per cent and 61 per cent respectively in their regions, as the highest.
Urama regarded Africa as stuck at being mere commodities producers and not value enhancers. Giving an example of cocoa beans, he explained that Africa had been a dominant producer of the product but cannot still grind its own cocoa. Using a graph, he revealed that Africa only accounted for 21 per cent of cocoa grinding, with control of three to six per cent of the chocolate retail market.
Disclosing that 75 per cent of Africa’s crude oil was still being exported in raw form, he asserted that failing to go beyond exporting raw materials was making Africa lose jobs and huge amounts of money.
The National Bureau of Statistics (NBS) had said yesterday that the Nigerian economy grew by 3.11 per cent, year-on-year, in real terms in the first quarter of 2022, raising the hope the development would “launch Nigeria to economic stability.”
The NBS stated in a tweet on its official page, @NBS_Nigeria, that the growth showed a sustained positive growth for six consecutive quarters since the recession witnessed in 2020.
“The first quarter 2022 growth rate further represents an improvement in economic performance,” the Bureau stated.
Experts, however, maintained that the current GDP failed to reflect the situation of the streets as businesses had slowed drastically.
“More often, economists get carried away with improving numbers, whereas poor microeconomics policies seem to bite deeper,” Godwin Owoh, a professor of applied economics, said.
“What is the impact of GDP growth without jobs?” the immediate past director-general of the Lagos Chamber of Commerce and Industry, Muda Yusuf, asked.