THE CASE FOR ECONOMIC TRANSFORMATION Dr. Yaw Ansu Chief Economist, - - PowerPoint PPT Presentation

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THE CASE FOR ECONOMIC TRANSFORMATION Dr. Yaw Ansu Chief Economist, - - PowerPoint PPT Presentation

Nov 19, 2023 9 likes •219 views

THE CASE FOR ECONOMIC TRANSFORMATION Dr. Yaw Ansu Chief Economist, ACET and Prof. Mina Baliamoune (presenter) Director of Research, ACET Growing Fast, Transforming Slowly Steady growth over last decade ~ 5% 7 of top 10 fastest

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THE CASE FOR ECONOMIC TRANSFORMATION

  • Dr. Yaw Ansu

Chief Economist, ACET and

  • Prof. Mina Baliamoune

(presenter)

Director of Research, ACET

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Growing Fast, Transforming Slowly

  • Steady growth over last decade ~ 5%
  • 7 of top 10 fastest growing economies

for next five years

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

We’ve seen this movie before… Growth in the mid-1960s to early 1970s is similar to growth in the 2000s. This earlier growth ended in crash of mid-1970s and 1980s and SAPs. Will it end differently this time?

Are the high GDP growth rates in SSA sustainable? Will they bring shared prosperity?

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Economic Transformation = Growth + DEPTH

AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Growth

Diversification Export competitiveness Productivity Technology Human well-being with

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The Economic Transformation Record (1970-2010)

  • Senegal,
  • Burkina Faso,
  • Ghana,
  • Nigeria,
  • Cameroon,
  • Ethiopia,
  • Kenya,
  • Uganda,
  • Tanzania,
  • Rwanda,
  • Zambia,
  • Botswana,
  • Mozambique,
  • South Africa,
  • Mauritius
  • S. Korea,
  • Singapore,
  • Malaysia,
  • Thailand,
  • Indonesia,
  • Vietnam,
  • Brazil,
  • Chile

SSA vs. vs.

*ACET-15 in SSA (2010): Population 70%; GDP 76 %; Manufacturing Value-added 85%; Agricultural Production 65%; Exports 80%

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Manufacturing is declining in

  • SSA. Without manufacturing,
  • pportunities for economic

transformation are limited. Why?

10 15 20 25 1970 1975 1980 1985 1990 1995 2000 2005 2010 Year SSA Average ACET15 Average Comp Average

Data Source:World Bank Development Indicators

Figure 1.6: Production Share-MVA (% of GDP)

Diversification of Production and Exports

Production Share – MVA (% of GDP)

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION 40 50 60 70 80 90 1975 1980 1985 1990 1995 2000 2005 2010 Year SSA Average ACET15 Average Comp Average

Data Source:UN ComTrade. Rev 2 Digit 3

Figure 1.7: Concentration of Exports-% Top 5 Exports Concentration of Exports (% of Top 5 Exports)

  • Exports are very

concentrated in SSA and ACET-15; top 5 exports products generally form over 70%

  • f commodity exports.
  • Marginal improvement
  • ver the 40-yer period

in SSA and ACET; dramatic progress in Comparators over the 1980s and 1990s.

Export Diversification: Share of Top 5 Exports

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION 10 20 30 40 50 1975 1980 1985 1990 1995 2000 2005 2010 Year SSA AVG ACET15 AVG COMP AVG

Data Source:World Trade Organization & IMF BoP Statistics Yearbook and data files.

Figure 1.9: Manufactures Exports (% of Total Goods and Services Exports, BoP) Manufacturers Exports (% of Total Goods and Services Exports, BOP) Exports in SSA and ACET-15 are concentrated mostly in commodities; manufactures under 20 percent. Very little progress over the past 2 decades.

Export Diversification: Small Share of Manufacturing Exports

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

SSA and ACET-15 exports have grown slower than those of Comparators and also slower than world exports (SSA and ACET-15 line below zero).

Export Competitiveness: Growth in Export Market Shares

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

20000 40000 60000 MVA 1970 1975 1980 1985 1990 1995 2000 2005 Year SSA Average ACET15 Average Comp Average

Data Source:UNIDO INDSTAT2, Rev 3 Digit 2

MVA per Manufacturing Worker

Labor Productivity in Manufacturing in SSA and ACET- 15 low and stagnant; high and growing in Comparators.

Productivity: Manufacturing

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

1000 2000 3000 4000 5000 1970 1975 1980 1985 1990 1995 2000 2005 2010 Year SSA AVG ACET15 AVG COMP AVG

Data Source:World Bank Development Indicators

Cereal yield (kg per hectare)

Productivity in agriculture (cereal yields - km/hectare) is also low. There have been improvements, but the rate is slow.

Productivity: Agriculture

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Share of Medium and High-Tech manufactures (i.e. using Lall Decomposition) is low and stagnant in SSA and ACET-15, while relatively high and rising in Comparators

10 20 30 40 50 60 1970 1975 1980 1985 1990 1995 2000 2005 Year SSA Average ACET15 Average Comp Average

Data Source:UNIDO INDSTAT2, Rev 3 Digit 2

% of Med. & High Tech. Manufactures

Manufacturing Technology (% of Med & High Tech Manufactures) .

Technology: Production

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Top 10 exports in Comparators have evolved gradually from Primary Commodities and Low Tech to Medium and High Tech; in Africa, we are still waiting for the change.*

Technology: Exports

*PP= Primary Products; RB= Resource-based; LT=Low Tech; MT=Medium Tech; and HT= High Tech

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

  • Despite the recent welcomed

change in Africa, real GDP per capita is only around 50 percent higher in 2010 than what it was in 1970 - 40 years ago.

  • In the ACET-15, it is about two

and half times higher. In the Comparators, however, it is 5 times higher.

Human Wellbeing—GDP per capita

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Some features

  • f

employment and unemployment in selected Sub-Saharan countries

Country Informal employment (%

  • f

total employment) Vulnerable employment (%

  • f

total employment)

Benin 2010 92.9 89.9* (2003) Ethiopia 2005 n/a 83.9 Ghana 2010 86.1 71.5 Kenya 2009 n/a 63.4*(1999) Mozambique 2005 92.8 84.8 Rwanda 2006 93.9 76.6 Uganda 2009 85.5 82.7* (2005)

  • Source:

Compiled from Baah-Boateng, Ansu, and Amoako-Tuffour (2013).

  • Human Wellbeing—Formal (Non-vulnerable) Employment: Over 80

percent of employment is non-formal or vulnerable

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Africa’s youth population to

  • utstrip China’s and India’s.

Demographic dividend or Demographic Bomb?

Meanwhile the youth population of SSA is rising very fast

50 100 150 200 250 300 350 400 450 2010 2015 2020 2025 2030 2035 2040 2045 2050 Millions

Population of Youth

SSA Africa India China

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

The African Center for Economic Transformation (ACET) – Championing Economic Transformation

  • Economic policy institute based in

Accra, serving Africa

  • Founded in 2007 to support

sustained growth through transformation

  • Staff of 30 from 10 African

countries, global network of leading thinkers and practitioners

  • Diverse board of highly

accomplished leaders in business, government and global development

AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

The ACET approach

AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Analysis Advocacy Advice

  • Engage African governments
  • Engage the private sector
  • Broker public-private dialogues
  • Share lessons among governments
  • Push for action
  • Ask new questions about old and emerging problems
  • Search for evidence around the world
  • Adapt solutions to Africa
  • Support governments to implement policy

(Think & Do)

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

The African Transformation Report (ATR) Common Structure

AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

  • Review of transformation performance (Growth + DEPTH)
  • The African Transformation Index
  • Discussion of some key drivers of transformation and relevant practical

examples for policy

  • Discussion of some Pathways to Africa’s transformation based on

Africa’s comparative advantage and global market trends Informed by country case studies (Botswana, Burkina Faso, Cameroon, Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Rwanda, Senegal, South Africa, Uganda, Tanzania, and Zambia)

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

First ATR--Contents

AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

Chap 1. Review of Performance, the ATI Chap 2. The State, the Private Sector and Economic Transformation Chap 3. Export Promotion Chap 4. Education and Skills Development Chap 5. Labor- intensive Manufacturing Chap 6. Agro- processing Chap 7. Extractives Chap 8. Tourism Chap 9. Regional Integration-- Creating Wider Markets for Transformation

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AFRICAN CENTER FOR ECONOMIC TRANSFORMATION AFRICAN CENTER FOR ECONOMIC TRANSFORMATION

African Transformation Report Launch—Feb. 2014 www.acetforafrica.org