au agenda 2063 the africa we want - perc-pace … · 2019. 10. 27. · au agenda 2063 the africa we...

AU AGENDA 2063THE AFRICA WE WANT

A Presentation Made at the 11th Africa Cooperative Ministerial Conference 2015 at the Gaborone International Conference Centre, Gaborone, Botswana October 12-15, 2015

Mohammed Kerre

Executive Director PERC-PACE International

[email protected]

www.percpaceinternational.com

mailto:[email protected]

http://www.percpaceinternational.com/

Africa a Paradox

10/11/2015PERC-PACE International, [email protected] 2

The Size of Africa

PERC-PACE International, [email protected] 10/11/2015 3

Africa faces Serious ChallengesChallenges

• Poverty • Health • Population growth and

Urbanization• Productivity • The threats of climate

change

Time Bomb

By 2063 Africa will have a population of about 2.67 billion, morethan twice the current pop figures

This population will include a workforce of more than 963.4million. A third of these workers are already born

Africa is challenged to quadruple employment opportunities overthe next 48 years, and grow and expand the business sector

Population trends reveal increased movement from rural to urbanareas, this should be reversed by raising productivity on the farmsand rural areas

Trends in higher education reveal a system unable to meetrequired labour needs of an expanding and growing business andemployment sector

Unless those working on farms and rural areas raise productivity,the rural population will face serious uneconomic subdivision ofland, migration into marginal areas, falling average income, andexposure to food insecurity.


HDI emphasizes the position of people andtheir capabilities in assessing developmentof a country. It interrogates national policyand impact on human development. It is asummary measure of achievement in: a) along and healthy life, (b) beingknowledgeable, and (c) having a decentstandard of living

Population (billion)

2015 June

Africa 1.17

Australia 0.02

Brazil 0.20

Europe 0.74

Japan 0.13

USA 0.36


Human Development Index (HDI) 2012

0.8-1.00

0.7- 0.79

0.55-0.69

Below 0.55

No Data

Data Source: UNDP

Human Development Index (HDI)

Africa – The Fastest-Growing Continental Economy on the Planet

Debt GrowthReal GDP


Growth of Global Wealth (Private Financial Wealth USD Trillions)

Region 2010 2011 2012 2017E

USD %Growth USD %Growth USD %Growth USD %Growth

North America 39.9 7.5 40.2 0.8 43.3 7.8 48.0 2.1

Latin America 3.2 9.8 3.6 9.7 3.9 10.5 5.9 8.3

Western Europe 33.7 5.0 34.0 0.9 35.8 5.3 40.6 2.5

Eastern Europe 1.8 3.4 2.1 16.4 2.3 13.2 4.0 11.3

Japan 16.7 10.2 16.8 0.6 17.2 2.4 18.2 1.1

Asia-Pacific 21.7 12.9 24.6 13.1 28.0 13.8 48.1 11.4

Middle East & Africa 4.3 8.5 4.4 3.7 4.8 9.1 6.5 6.2

Global 121.4 7.3 125.7 3.6 135.5 7.8 171.2 4.8

Source: BCG Global Wealth Market Sizing Database 2013Note: Private financial wealth numbers for all years were converted to USD at year-end 2012 exchange rates to exclude the effect of currency fluctuations


Human Poverty

Indisputable Facts

1. 75 percent of the world’s poorest countries are located in Africa.

2. In 2010, 414 million people were living in extreme poverty in sub-Saharan Africa, today this stands at 490 million and is projected to be 1.2 billion by 2063.

3. Approximately 1 in 3 people living in sub-Saharan Africa are undernourished.

4. 547 million people live without electricity in sub-Saharan Africa.

5. Over 500 million Africans suffer from waterborne diseases.

6. Every year, sub-Saharan Africa loses USD 28.4 billion to water and sanitation problems.

7. 38 percent of the world’s refugees are located in Africa

8. Less than 20 percent of African women have access to education

9. Women in sub-Saharan Africa are over 230 times more likely to die during childbirth or pregnancy than women in North America. Approximately 1 in 16 women living in sub-Saharan Africa will die during childbirth or pregnancy. Only 1 in 3,700 women in North America will

10.More than 1 million African children die every year from malaria.

Highest and Lowest Human Poverty Index Scores

Rank Territory Value Rank Territory Value

1 Burkina Faso 655 191 Japan 11.1

2 Niger 614 192 Spain 11.0

3 Mali 589 193 France 10.8

4 Ethiopia 555 194 Luxembourg 10.5

5 Zimbabwe 520 195 Germany 10.3

6 Zambia 504 196 Denmark 9.1

7 Mozambique 498 197 Finland 8.4

8 Chad 496 198 Netherlands 8.2

9 Mauritania 483 199 Norway 7.1

10 Guinea Bissau 480 200 Sweden 6.5

Human Poverty Index-1 for Highest, Human Poverty Index-2 divided by 10 for lowest; both on scale of 0-1000

Produced by the SASI group (Sheffield) and Mark Newman (Michigan)


Challenge: To build human capital of the poor in order to

foster equality of opportunity

http://fyi.uwex.edu/community-data-tools/files/2011/02/povertymap.jpg

http://fyi.uwex.edu/community-data-tools/files/2011/02/povertymap.jpg

Africa: Rich Yet DeprivedAfrica: A Rich Continent

• Diamonds: 46% of the world, divided asBotswana 35%; Congo (Kinshasa) 34%;South Africa 17%; Angola, 8%

• Gold: 21% of the world, divided as SouthAfrica 56%; Ghana, 13%; Tanzania, 10%;and Mali, 8%.

• Uranium: 16% of the world, divided asNamibia 46%; Niger 44%; South Africaless than 10%.

• Platinum/Palladium: 62% of the world,divided as South Africa 97%.

• Nearly 60% of the world’s arable land is in Africa;

• Better-than-world-average growth of scientific production in Africa.

We lack the basics and Yet we have the best


http://en.wikipedia.org/wiki/Diamonds

http://en.wikipedia.org/wiki/Gold

http://en.wikipedia.org/wiki/Uranium

http://en.wikipedia.org/wiki/Platinum

Growth, Jobs and Africa’s Labour Force

Trends Last decade was Africa’s best witnessing

growth in GDP of 4.5% compared to 2% in the 20 years before

Half of the population is under 25 years of age

It is estimated that each year between now and 2035 there will be 0.5 million more 15-year-olds than the year before joining the labour market

Almost all African countries depend on primary commodities for their exports

Manufacturing’s share of GDP has been declining since 1980

Over the past two decades agriculture’s share in GDP contracted, but manufacturing did not replace it

Employment capacity of modern sector (wage jobs) 16%, informal sector 84%

Africa’s Labour Force

Today there are 427.5 million in Africa’s workforce

72 million new wage paying jobs could be created by 2020

36% of workforce in wage-paying jobs if this potential is realized

128 million consumer households, up from 90 million in 2011

48% of Africans with secondary or tertiary education


Impacts on Productivity

• The HDI reveal a weak workforce, incapacitated labor force whichhas been estimated to cost the region USD 12 billion annually

• Both the HDI and the weak industrial base have seen Africa use only30% of its potential

• Quality/Relevance issues of Higher Education and Research, resultingin mismatch in skills between supply and demand

• Even with the large deposits of natural resources, Africa is notproducing as many resources as it should. For instance If you look atexploration by kilometers, Australia spends USD60-USD65 perkilometer on exploration, while Africa spends only USD5.

• Africa has only 2.2 percent share of world’s market in intermediarygoods


The Talk: How do we Move Africa Forward??

AU Agenda 2063

African Union Agenda 2063:

The Africa We Want


AU Agenda 2063

Purpose

To realize an integrated prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena

The Agenda coming into force in 2013 marked the end of the first 50 years of independent Africa and pronounced direction for the next 50 years.

The thrust is on Unity – continental unity by 2030

Focus is on:

Putting mobilization of the people and their ownership of the continent programmes at the core

The principle of self-reliance and Africa financing its own development

The importance of capable, inclusive and accountable states and institutions at all levels and in all spheres

The critical role of Regional Economic Communities as building blocks for continental unity

Holding ourselves and our governments and institutions accountable for results

Actions

1. Eradicate poverty in a generation by 2025,

2. Catalyze a Education and Skills revolution and actively promote science, technology, research and innovation, to build knowledge, human resources, capabilities and skills for the African century

3. Transform, grow and industrialize our economies through beneficiation and value addition or natural resources

4. Consolidate the modernization of African agriculture and agro-businesses

5. Address climate change and preserve the environment

6. Connect Africa through world-class infrastructure with a concerted push to finance and implement the major infrastructure projects

7. Support Young people as drivers of Africa’s renaissance

8. Silence the guns by 2020

9. Achieve gender parity by 2020 in public and private institutions

10. Introduce an African Passport

11. Consolidate a democratic and people-centered Africa

12. Enhance Africa’s united voice in global negotiations

13. Strengthen domestic resource mobilisation, build continental capital markets and financial institutions, and reverse the illicit flows of capital from the continent by 2025


What we have Learnt from Implementing MDGsAudit

Poverty is falling, though slow, with a real risk of reversals from shocks

Africa’s productivity, as measured by output per person employed is on the rise

Africa’s growth has been relatively strong but not rapid or inclusive enough to create adequate decentemployment opportunities

Disasters and persistent conflict are obstructing the path to food security

Africa is close to the universal primary education enrolment target

Improving primary education completion rates remains a challenge

High primary enrolment rates are boosting youth literacy

Improvements in girls’ enrolment and achieving gender parity

Uneven gains in the share of women in wage employment in the non-agricultural sector

Africa is leading the way in women’s representation in national parliaments

Impressive progress in reducing child mortality

Challenges abound in maternal health despite tremendous progress

Downward trend in HIV/AIDS, malaria and tuberculosis

Africa’s progress on environmental targets exceeds global performance

Access to safe drinking water and sanitation is improving slowly, but progress remains skewed towardsurban areas

North Africa maintains the lowest slum prevalence among developing regions

Wide gap between trade and ODA commitments and delivery

Debt sustainability is a growing concern

Notable progress in technology indicators

Lessons Learnt Initial conditions are important in achieving and

accelerating progress on global goals– we should balancebetween incremental progress and quality of progress

Effective communication and follow-up are critical for thesuccess of global agendas – they help to sustain pressureon governments to fulfil their social compacts

Policy makers must be mindful of the utility andsustainability of their investments.

Sustainability requires addressing the root causes, notthe symptoms of underdevelopment

Global development agendas are likely to succeed if theyare underpinned by a credible and committed means ofimplementation that takes into account both financialand non-financial resources

Given the interrelatedness of the goals focusing ondevelopment interventions that have the greatest knock-on effects heightens impact

There are effective and often low-cost impactinterventions that can drive progress on global agendas.These interventions must be focused on populations thatare vulnerable or most at risk, which include women,girls, the extremely poor and rural dwellers.


Will this time be Different?

Africa’s problems stem from

Flawed policies and intervention strategies

Toxic politics of poverty, underdevelopment and aid

Data challenges facing national statistical systems

Lack of political will

In addition we

Frame the development crisis as colonial rather than government excess

Diagnose the causes of underdevelopment as behavioural (citizens not tuned to hard work anddevelopment) rather structural (linked to the design of the economic and social regimes)

Based on this we have produced policies that have failed to provide lasting solutions

The policies have left Africa at risk of deflation, with slow growth, high unemployment,rising inequality, and a humanitarian crisis threatening the poorest and marginalised


The GenesisThe problems of the AU go back to its beginnings – embedded in its design – political summit

Member states have not been able to set up a common pool of centralised resources

This has meant that Africa is unprepared to respond to a major crisis

Having no mechanisms in place any crisis is a major challenge

Africa requires vision and courage, both of which have turned out to be in short supply

Public, Economic and sovereign debt burden drive governments to deploy restrainedresponse, push for fiscal tightening, and fearing financial markets response have not madeprivate creditors bear losses, which instead have been transferred to tax payers

As a consequence the poorest citizens have found themselves without access to adequatenutrition, affordable healthcare, or shelter while increasingly high unemployment hasproduced waves of emigration of the more highly skilled, especially youth across andbeyond the continent


The Flawed Policies and Intervention Strategies

The flawed policies are responsible for Africa’s poor social development andeconomic performance.

These policies involve failure with regard to framing of challenges, diagnosis,choice of remedies, and lack of deep solutions.

Often chosen remedies have centered on cyclical policies of sound money,budgetary austerity, and structural reform instead of counter-cyclical policies thatcould have generated growth through macroeconomic stimulus, industrialinvestment, and socioeconomic support

Africa has a long history of progressively abandoned policies, and when thishappens the sum of these policy instruments does not constitute a realdevelopment strategy

The results of these policies speak for themselves in terms of their effects oncitizen’s welfare, health, and job prospects. Youth unemployment was at 20.9% inAfrica as a whole in March 2015, with over 40% in Kenya, and over 50% in Ghanaand Zambia


Increasing Volatile Politics

The citizen’s attitude towards both their national governments and the AU have declined. This has been fueled by both economics and the politics in which

political decision-making process at the AU level has little effect at national level

The level and role of citizen participation in AU is not defined

Mechanisms for citizen engagement are lacking or weak


Big Data

Agenda 2063 wont do much good if we cant track progress towards the 13 Actions?

Who is going to lead development of big data?

Where is big data management capacity?


Data Challenges

Challenges

Data integrity and quality

Analytics

Data stewardship and

security

Content and records

management

Management of research

data

Invest in Data Collection and Analysis

Monitoring and evaluation has proven key to advancedevelopment agendas by detecting problems in theimplementation process and proposing adequatecorrective actions. To take full advantage of themonitoring and evaluation (M&E) function, countries anddonors need to invest in data collection and analysis, withparticular emphasis on generating disaggregated data forkey social groups.

Approach content from an enterprise view, being diligentabout identifying and documenting the subset ofdocuments that need special treatment as records, andmaintain a high quality data environment


Political Will

Agenda 2063 identifies a lot of goals, even more targets,and indicators. These in themselves, describe a series ofoptions. The effective implementation and realization willdepend on how the different governments will [navigate]over these complex maps to attain the goals decidedupon.

Political will

Commitment to action

Paradigm shift


Will this time Really be Different

Can the AU change its policies, politics and processes in such a way as to resolve the challenges facing Africa once and for all?

Much suggests that this is unlikely


Education and Training

University enrolment rates in sub-Saharan Africa are among the lowest in the world, averaging 5%

International economists have considered this fact irrelevant to Africa's development and have advised African governments to reduce university budgets

However, the correlation between university enrolment rates and national income is strong

No high income country, other than Switzerland, has university enrolment less than 50%

Korea’s growth in wealth occurred simultaneously with 10-foldincrease in university population


University Enrolment Rates and National Income

Gross National Income and university enrolment are strongly correlated, both between countries and over time in one evolving country

This figure shows 2005 data from a sample of 106 countries, excluding micro-states, major oil producers, and former Soviet republics

Sub-Saharan countries are shown in red. Comprising most of the low-income and low-enrolment data points

The four non-African countries shown here with university enrolments <10% and per capita income <USD 2 per day are Cambodia, Pakistan, Nepal and Bangladesh

The evolution of South Korea from 1970 to 2005 is shown in blue


Conceptual Links from Higher Education to Economic Growth

In a knowledge economy, tertiary education can help economies keep up or catch up with more technologically advanced societies. Higher education graduates are likely to:

be more aware of and better able to use new technologies

develop new tools and skills themselves.

improve the skills and understanding of non-graduate coworkers, while the greater confidence and know-how inculcated by advanced schooling may generate entrepreneurship, with positive effects on job creation.

Higher education can lead to economic growth through both private and public channels

The private benefits for individuals include better employment prospects, higher salaries, and a greater ability to save and invest resulting in better health and improved quality of life, thus setting off a virtuous spiral in which life expectancy improvements enable individuals to work more productively over a longer time further boosting lifetime earnings.

Public benefits are less widely recognized, which explains many governments’ neglect of tertiary schooling as a vehicle for public investment. But individual gains can also benefit society as a whole. Higher earnings for well-educated individuals raise tax revenues for governments and ease demands on state finances. They also translate into greater consumption, which benefits producers from all educational backgrounds.


Do the Cooperatives Have a Role?


In 1995 Ian MacPherson, said

“Full individual development can take place only in association with others. As anindividual, one is limited in what one can try to do, what one can achieve. Through jointaction and mutual responsibility, one can achieve more, especially by increasing one'scollective influence in the market and before governments”

Background paper on the Cooperative Statement of Identity, ICA, Geneva,1995


Concern for Everybody Cooperatives are essential vehicles for socio-economic development

There is significant presence of cooperatives in all the countries of Africa and allsectors of the economy

Seven percent of the African population have affiliation to primary cooperatives

The percentage of dormant cooperatives varies from 20 to 80%

Between 0.5% (2,137,500) and 1.3% (5,557,500) of the total labour force (427.5million) derives their employment from the presence of cooperatives

Beyond the employment and the income that cooperatives generate, their socialimpact is limited

Cooperatives are yet to provide measurable and comparable systems of socialprotection

Cooperatives in the development of Africa should be of concern to everybody. They arevital to the African economy, driving growth and innovation and tackling major socialand business challenges. The continent’s ability to reconstruct the sector to this level is aimportant factor in attracting global investors to locate high-value enterprises.


Toward a Circular Economy

What is a Circular Economy? A Regenerative Economic Model creating more value while reducing

dependence on scarce resources

In a circular economy products are designed to enable cycles of disassemblyand reuse, thus reducing or eliminating waste

Creating an economic system that restores material, energy, and labour inputswould benefit business and society alike. The savings in materials alone couldtop USD 1 trillion a year

As Co-operatives what can we do about this?

Embed circular economy thinking in our strategic vision and mission, both ascompetitive necessity and with the conviction that cooperatives solving theproblem of resource constraint will have advantage

Focus on improving resource efficiency and financial attractiveness

Learn how value is created in a circular economy to better design and optimizeproducts for multiple cycles of disassembly and reuse.

Create new relationships with customers to ensure materials are returned.

Focus on the economics and logistics of turning products into materials—notjust the other way around.

Cooperate with other business groups in the precompetitive sphere in orderto create scalable markets for complex materials.

Need for an Enabling Framework

Individual cooperative or business enterpriseactions, while necessary, wont suffice to create acircular economy at a scale to generate impact.The real playoff will come only when:

Multiple players across the business, researchand academia communities supported bypolicy makers and investors, come togetherto reconceive key processes and flows ofmaterials, products and services

Appropriate policies, legislations andregulations are enacted to support theprocesses and flows and eliminate thebarriers


How do we make a difference?

At a Global Level Advocate for and participate in establishing an effective communication

and follow-up system that will ensure success of Agenda 2063

Promote and oversee effective citizen education and awareness raising

Mobilize citizens to pressure governments to intensify efforts and devoteresources towards addressing the 13 Actions

Address the root causes rather than the symptoms of what distresses thedevelopment process in Africa

Exploit inter-sectoral synergies to maximize impact

Reduce poverty, inequality and unemployment through inclusive andsustained growth

Enhance social development

Champion a skills agenda for youth

Promote diversification as a major strategy to improve productivecapacities and improve global partnership prospects

Countries and international community to commit to effective means ofimplementation of Agenda 2063

The Co-Operative movement to engage governments on policies andreforms critical for transformation from labour intensive primarycommodity market to labour intensive manufacturing market

At an Institutional Level

Growth through Resource Productivity. How: Five Drivers.

Think Lean: Cut away anything that does not add value,eliminate anything that leads to wasted resources throughstandardization and quality control and best practices

Think Limits: Focus on outcomes

Think Profit per Hour: a real time operational metric

Think Holistic: Success requires a thorough change-management effort. Leaders and Managers must setmeaningful and achievable goals, and persuade oftenreluctant organizations to embrace and pursue them.

Think Circular: We should treat supply chains as circles, wherethey can create new value by looping products, components,and materials back into the production process after theyhave fulfilled their utility over the product life cycle. This is acomplex endeavor—it requires designing products in a newway, adopting business models that go beyond a mere one-time sale, and revamping supplier relationships.


All is Not Lost

We shall accumulate machinery and establishsteel works, iron foundries and factories; weshall link the various states of our Continentwith communications; we shall astound theworld with our hydroelectric power; we shalldrain marshes and swamps, clear infestedareas, feed the undernourished, and rid ourpeople of parasites and disease.

It is within the possibility of science andtechnology to make even the Sahara bloom intoa vast field with verdant vegetation foragricultural and industrial developments”.

President Kwame Nkrumah, May 24, 1963


The cooperatives have the requisite capacity

The infrastructure

The human capital

Asset base

The political will


Conclusion

Sustained and robust GDP growth is a prerequisite for expandingopportunities in Africa

But to create better outcomes for citizens and economies as a whole,policy makers and business leaders need to work together toaccelerate wealth creation and productive jobs across the continent

Achieving this will require many of Africa’s governments to operatein new ways, and to work together with the private sector

But, possibly for the first time in Africa’s history, the continent has achance to achieve transformative growth that is widely shared

It is now up to Africa’s leaders, both public and private, to seize thisopportunity


Thank You Very Much

And may you be guided in remaking Africa

So that there is more from less

And making resources more productive


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