Roundup: African economies urged to innovate to avoid global shocks

Governments across Sub-Saharan region should embrace innovative policy options to enhance the resilience of their economies in the light of external shocks like global economic slowdown and erratic weather patterns, policymakers and executives said at a forum in Nairobi on Wednesday.

Kenya's Cabinet Secretary for Commerce and East African Affairs Phyllis Kandia, industry chiefs, multilateral lenders and scholars attended the high-level forum on innovating African economies.

In her opening remarks, Kandie noted that Africa's economies have capacity to withstand tremors linked to a slump in commodity prices and anti-globalization wave in the west if governments prioritize policy reforms, cross border trade and harnessing of youth bulge.

"Our economies must innovate in order to adapt to disruptions that are being driven by automation and resistance to globalization in some parts of the developed world," Kandie remarked.

The International Monetary Fund (IMF) said recently that economic growth in Sub-Saharan Africa could slow down by 3 percent this year due to low commodity prices.

The private sector arm of the World Bank urged African countries to diversify their economies from over-reliance on natural resources to services and advanced manufacturing.

Kandie noted that African countries that have recorded higher economic growth have invested in financial services, agro-processing, ICT and tourism as opposed to traditional sectors.

"Having a critical mass of skilled manpower is a resource on its own while advanced manufacturing is creating more jobs while boosting the competitiveness of our products in the overseas market," said Kandie.

Visionary leadership, intra-Africa trade and tapping into the youth bulge is key to accelerate economic growth in Africa.

Kandie said that operationalization of the Africa Free Trade Area (FTA) alongside elimination of visas will unleash new prosperity in the continent through unrestricted movement of goods, services and skills.

"A visa free Africa that has been envisioned by political leaders is a giant step towards robust cross border trade and movement of talented workforce that is required to modernize our economies," Kandie said.

African countries could experience rapid economic transformation this year if governments and industry joined hands to implement policy and regulatory reforms to attract investments.

Kenya's leading industry captain, Chris Kirubi said that innovations will boost resilience of Africa's economies against a backdrop of external stresses.

"Global investors are still upbeat on investment climate in Africa since they are assured of faster returns. We could be the next frontier for investments in new industries if the policies are reformed and political stability is sustained," said Kirubi. Endit