UNCTAD profers solutions to attain economic growth
from MASAHUDU KUNATEH in Accra, Ghana
ACCRA – THE United Nations Conference on Trade and Development (UNCTAD) said increasing the productivity and quality of investment to strategic and priority sectors of local economies were key to achieving transformational growth.
It highlighted such sectors as infrastructure, agriculture and manufacturing.
Subtitled: “Catalysing Investment for Transformative Growth in Africa,” the report said that Africa could not achieve sustained economic growth and transformation without diversifying the sources of its economic growth both on the demand and supply sides of its economies.
The report added that Africa has experienced relatively high growth during the past decade but the nature and pattern of this growth has not resulted in more jobs and poverty reduction because consumption has been the dominant driver.
On the demand side, the report recommended balancing the relative contributions of consumption and investment to the growth process since it is evident that a consumption-based growth strategy cannot be sustained in the medium to long term.
In order to reverse the current account imbalances associated with high consumption, countries often require drastic reductions in consumption that then have a severe negative impact on growth, the report notes.
On the supply side, the report recommended that sources of growth also be diversified, requiring a shift from low- to high-productivity activities, both across and within sectors.
The report showed that structural problems exist with Africa’s recent growth from a supply or sectoral perspective, with many countries yet to go through the normal process of structural transformation, characterized by a shift from low- to high-productivity activities, and a declining share of agriculture in output and employment, as well as an increasing share of manufacturing and modern services in output.
– CAJ News
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