African Union: Continent needs more industrialization to thrive

The African Union brought together economists from around Africa and abroad for its Fourth Congress of African Economists recently in Accra, Ghana.

“Industrial Policy and Economic Performance in Africa” was the theme of the event, with speakers discussing the challenges African economies face and how countries can spur or sustain economic growth.

“African economies are currently going through a rough patch," Anthony Mothae Maruping, commissioner of economic affairs of the African Union, said. "Demand for raw-materials exports has sharply declined, commodities prices have dropped drastically, drought is adversely affecting agricultural production and hydro-electric power generation, thus exacerbating energy deficit.

"The unemployment rate is rising, and incomes are declining. Poverty is rapidly rising. Tax bases are shrinking. Fiscal deficits are widening," Maruping said. "Foreign exchange reserves are dwindling. Domestic borrowing has soared. External borrowing has been complicated by credit-rating downgrades. Authorities in most cases are resorting to deep expenditure cuts affecting supply of necessities. Business-as-usual is not an option."

Maruping said industrialization is key to addressing these challenges and cited 7 percent real annual growth as a target for rapid growth. Right now, African economies are averaging between 4 and 5 percent.

The Conference of African Economists is held every two years as a way of gathering policymakers, researchers and economic developers in one location to create strategies for specific challenges facing African economies. It's also an opportunity for African economists to circulate their research results.