Economic Report 2011 highlights need for job creation and poverty reduction

The Economic Report on Africa 2011 was today launched in Addis Ababa, Ethiopia, underlining key issues such as the need for Africa to have a diversified economy that can create decent jobs, create wealth and reduce poverty - hence economic transformation as one of the key lessons of the recent global crisis.

A flagship publication jointly produced by the UN Economic Commission for Africa and the African Union, the report covers developments in the world economy and implications for Africa, growth and social development in Africa in 2010 and prospects for 2011, current and emerging development challenges in Africa, the state and Africa’s development challenges and Africa’s need for a developmental state.

The report also covers the role of the State in Economic Transformation in Africa and Africa’s Need for a Developmental State: Opportunities and Challenges.

According to the report, the persistent problem of lack of economic diversification and transformation in many African countries. and the volatility of growth induced by the continuing vulnerability to external shocks constitute powerful arguments for rethinking the continent’s development strategy.

It noted that sustainable economic growth and social development constitute the primary goals of economic policy in Africa.

According to the report, it is expected that solid advances towards these goals will not only result in rising living standards across the continent, but will also lead to a full employment of resources, as well as reduce income inequality and poverty.

On developments in the world economy and the implications for Africa, the report revealed that African economies have recovered from the global financial and economic crisis better that expected. However, it noted that Africa’s heavy dependence on natural resource exports poses difficult and persistent problems.

The economic report also revealed that the global economy is expected to recover slowly in 2011, with persistent concerns over high unemployment and weak confidence, among others.

It further stated that Africa’s challenges with the current global financial architecture relate mainly to lack of voice and effective representation in decision making bodies.

On growth and social development in Africa in 2010 and prospects for 2011, the report noted that Africa’s progress towards the Millennium Development Goals is mixed, and varies by sub-region, country and by goal.

On Africa’s need for a developmental state, the report emphasized that the primary goal of the African developmental state is to overcome the continent’s inherent development challenges, focusing on a high and sustainable economic growth rate through diversification and transformation.

The key mechanism, it added, is a comprehensive development framework that steers social and economic policies in a complementary manner.

“The developmental state provides guidance in constructing this framework, in defining the overall national development goals and in implementing the relevant macroeconomic, structural, microeconomic and social policies.

“The impact of these policies will inevitably create winners and losers, among various economic agents, both as producers and consumers, and indeed, all segments of society may be called upon to make short-term, socio-economic sacrifices for society’s long-term benefit,” the report explained.