African economy needs new growth stimulants: experts

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JOHANNESBURG – The African continent is still heavily reliant on commodities, but the volatility around prices has left some countries searching for new growth drivers.

Industry leaders met at the annual Africa Outlook Conference, to discuss challenges and also come with solutions to achieve inclusive economic growth on the continent.

There have been growing calls over the last couple of years for inclusive economic growth.

And to achieve this, company executives say Africa will need to diversify its economic approach if it’s to benefit its young population.

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Dr Martyn Davies from Deloitte says, “The challenges particularly for West African economies, like Angola, Nigeria and the oil propelled economies is to move away from the single resource driven nature of growth to more diversified. Of course that’s not a policy switch, it’s a generational play. So it’s about resilience, it’s about long term planning.”

Although Africa is a mineral-rich continent with in- demand commodities like gold, diamonds and oil, experts say it’ll need to stop relying on importing.

They say Africa needs to start producing and manufacturing to gain more value from the resources, while exploring other markets, including the agricultural sector.

“Of course, the demographics are such that growth needs to provide opportunity for the future, for young people… ultimately African economies have to do like Asia has the last generation, diversify, industrialize, create salaried classes, middle classes or very least aspirational middle class societies. And that I think is ultimately inclusive. So inclusive growth is diversified economies,” says Dr Davies.

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African countries will also need to overcome infrastructure and energy challenges in order to enable the youth to take part in the economy.

This would take a partnership between government and the corporate sector, who need to start being relevant to the African market where the youth are increasingly becoming entrepreneurial.

Industry players concede that Africa will need considerable capital to impart skills, so that local businesses can be ready to take up opportunities brought by multinationals, with a strong focus on technology and digitization.