Kigali - The recent rapid economic growth in a number of African countries had not translated into an increase in production, WEF chief economist and member of its executive committee, Jennifer Blanke, said on Wednesday.
Speaking on the first day of the annual conference, Blanke said: “Production has slowed down despite the fast growth. This raises questions about the sustainability of the growth process. Something is not keeping up.”
Read: Africa needs more investment
She said there were a number of shortcomings to address in order to improve productivity, including education and technology.
Blanke said the economic growth had also failed to narrow inequality as a number of African countries had a high Gini coefficient, the common measure of inequality. “The issue is inclusion of people in the economic growth.”
Despite the economic growth, African countries were not spending enough on infrastructure, leading to, among others, poor access to energy and unreliable power supply “for those who have the access”.
“About 600 million Africans did not have access to energy,” she said.
Leadership needed
African nations had to spend $830 million (R13 billion) in new power infrastructure requirements by 2040, Blanke said.
Former UN undersecretary-general, Kandeh Kolleh Yumkella, said bold leadership was needed to ensure policy certainty. “Even in countries with abundant natural resources such as Nigeria, there is no access to energy.“
Countries should consider combining mobile payment systems and renewable energy technologies to address so-called energy poverty. “How do we, through public policy, help to bring the two platforms together?” Yumkella said.
EY director Sugan Palanee said there was distrust between governments and the private sector. “We must work to bridge that gap. We have policies, but those policies need to evolve so that they talk to the needs of the private sector,” he said.
Geoffrey Rothschild, the director of the New Partnership for Africa’s Development Business Foundation, said investment in energy needed policy certainty. He said there were companies ready to invest in the sector, “but people need government policy that enables them to go to that space”.
BUSINESS REPORT