With the less than two months to the end of 2019, businesses, governments and individuals have been counting the gains and losses attained during the year throughout the world. For experts and public affairs analysts, there is a need for celebration and reflection on what has been achieved and what has not been attained in line with the socioeconomic and political goals set earlier in the year.
Four years ago, African leaders joined other leaders in the world and agreed to address a number of problems facing people by 2030. They also wanted to have “Africa we want”, a continent where everyone would be more prosperous by 2063.
To meet the first agenda, existing information indicates that the continent needs to raise an estimated 11 per cent of GDP per year for the next 10 years to close the financing gap. Attaining the second agenda would largely depend on having the political will to implement the goals and targets of the agenda. As espoused by the analysts, the continent needs the will and adequate resources before sustainable solutions could be created and captured from the continent’s market space of about US$3.4 trillion, and a consumer base of 1.27 billion.
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Rumblings of Recession
Though, the governments on the continent have been working out various modalities and initiating programmes towards overcoming numerous socioeconomic challenges hindering its development in the last decade. It, however, appears that the continent would have more issues to contend with in the next decade as trade war continues among some countries, especially between the United States and China, which has been seen as one of the signs of global economic downturn in 2020. Already, the global manufacturing sector is experiencing the heat. The key US manufacturing index hit its lowest point in more than a decade recently. Report has it that the war between the US and China inflicted wound that needs to be healed by the President Donald Trump until his re-election. The failure to get the right solutions would nose-dive the economy early next year because many global companies would continue to have problems in planning their operations with the lowest investment as the main consequence.
The outcome of the consequence would be a global recession in 2020, which has been linked with the weaker growth that would be experienced in advanced and developing countries. The countries such as the United States, Germany, Japan and China with the substantial space acquisition in global manufacturing will experience a slowdown in the sector. China has already reported its worst manufacturing output in 17 years. Hong Kong, the United Kingdom, Italy, Turkey, Argentina, Iran, Mexico, South Korea and Brazil are also expected to have share of the global recession in 2020. According to the United Nations, countries and policymakers need to refocus on jobs, wages and investment. “Finance ministries and central banks should end their “obsession with stock prices, quarterly earnings and investor confidence” and instead focus on job creation, boosting wages and increasing public investment.”
The lingering question among the experts and public analysts from the Africa and other continents is where would African countries be in 2020. Is the continent ready for the recession? Checks reveal that the continent would not be left out in having the pie of the recession because the countries identified as early places of the recession are the major trade partners of the continent. And that the competitiveness of the economies of most countries remains low since 2015 linked to weaker institutions, ineffective economic policies or programmes and a number of factors.
Resonating with the United Nations’ warning on the recession, the competitiveness landscape as painted by the 2019 Global Competitiveness Index indicates more efforts to restore productivity and growth to lift living standards.
“Led by Mauritius (52nd), sub-Saharan Africa is overall the least competitive region, with 25 of the 34 economies assessed this year scoring below 50. South Africa, the second most competitive in the region, improves to the 60th position, while Namibia (94th), Rwanda (100th), Uganda (115th) and Guinea (122nd) all improve significantly. Among the other large economies in the region, Kenya (95th) and Nigeria (116th) also improve their performances, but lose some positions, overcome by faster climbers.”
In addition to the United Nations’ proposed remedies to the recession, leaders, businesses and policymakers need to strengthen the global value chain to boost growth, create better jobs, and reduce poverty while robust reforms should not be jettisoned. Africa needs to pursue open and predictable policies, and revive multilateral cooperation. Beyond these, Africa must embrace new technologies within the global value chain to create new products and increase productivity.