State of structural transformation in Central Africa Presented

State of structural transformation in Central Africa Presented at the EPRN-FES working group on Socioeconomic Structural transformation: Session: What Socio-economic transformation means in the African context? Thursday 18 February 2021, Via ZOOM Mama KEITA Director, UNECA SRO-EA SEPT 2019 1

Economic Diversification through Resource-based and trade-induced Industrialation OUTLINE q. Stylized facts of structural transformation q. State of structural transformation in Central Africa q. Key messages 2 Situation de la transformation structurelle en Afrique Centrale: défis et opportunités UNECA. ORG

Economic Diversification through Resource-based and trade-induced Industrialation Sylized facts of Structural transformation 3 MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités UNECA. ORG

Economic Diversification through Resource-based and trade-induced Industrialation Examples of structural transformation La transformation structurelle signifie la réallocation de l'activité 4 MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités UNECA. ORG

Economic Diversification through Resource-based and trade-induced Industrialation Examples of structural transformation 5 MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités UNECA. ORG

Economic Diversification through Resource-based and trade-induced Industrialation Examples of structural transformation Espace produit 6 MAINen. TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités Complexité économique UNECA. ORG

Economic Diversification through Resource-based and trade-induced Industrialation Examples of structural transformation 7 MAINen TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités UNECA. ORG

Economic Diversification through Resource-based and trade-induced Industrialation Why should ST and diversification be promoted? q Stronger and sustained growth q Resilience to shocks q Better allocation of productive resources q Higher productivity q More decent jobs q More sophistication, complexity, competitiveness q Better attractiveness for investors q Integration into CVRs and CVMs q Rising standard of living and development MAINen TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités 8 UNECA. ORG

Economic Diversification through Resource-based and trade-induced Industrialation State of structural transformation in Central Africa 9 MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités UNECA. ORG

Characteristic of St in Central Africa • Despite the substantial comparative advantages due to RNs and geography, over the past 30 years we have observed: q Marginal transformation of the structure of GDP, low diversification, dominant extractive sector, poorly developed manufacturing; q Growth model based on the export of primary products; q negligible productivity gains; q Predominance of imports for final consumption q An unattractive business environment q Very weak regional integration MAINen TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Characteristic of St in Central Africa • Despite the substantial comparative advantages due to RNs and geography, over the past 30 years we have observed: q Marginal transformation of the structure of GDP, low diversification, dominant extractive sector, poorly developed manufacturing; q Growth model based on the export of primary products; q negligible productivity gains; q Predominance of imports for final consumption q An unattractive business environment q Very weak regional integration MAINen TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Context q Eleven countries (ECCAS) q A large market: 187 million visitors in 2017 q Large area: 6. 7 million km 2 q Rich in various natural resources: Petroleum, mining, agricultural, forestry, tourism, energy, q Strategic position on the African continent q High economic vulnerability; Many countries under fiscal consolidation program with Reduced budgetary margin; q A few hotbeds of insecurity compromise growth; MAINen TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Contexte 30, 00% 25, 00% 20, 00% 15, 00% 10, 00% 5, 00% 0, 00% 2000 -2004 2005 -2009 2010 -2014 2015 -2017 -5, 00% -10, 00% -15, 00% Afrique Centrale Angola Burundi Cameroun Congo, Rep. Dem. Gabon Guinee Equatoriale République Centrafricaine Rwanda Sao Tome et Principe Tchad • 2000 -2009: croissance moyenne de 6, 5% par an bien au-dessus de la moyenne africaine • 2010 -2014: la croissance sous-régionale a continué de progresser: 5, 2% • 2015 -2019: la croissance sous-régionale a chuté à 0, 1% MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

• Malgré l’abondance en ressources naturelles, la destination Afrique centrale est une des moins attractive auprès des investisseurs et marchés internationaux MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

• Une faible diversification des économies et une structure relativement constante MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Production • Une faible diversification des économies et une structure relativement constante MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Production • Forte contribution des exportations de produits primaires à la richesse nationale MAIN TOPIC

Production • Forte contribution des exportations de produits primaires à la richesse nationale MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Export and imports by final usage Central Africa 2007 - 2015 19

ECA GVCs and RVCs development in Africa… Figure C: Cocoa RVCs: value added content of exports to regional markets as percentage of exports to world markets in selected countries 80 70 60 Percenatge 50 40 30 20 10 Source: Author based on ITC Trade map il az Br al M do ne ay s ia sia na In ha G er o m Ca Cô t ed 'Iv oi re on 0

Product space CEEAC 21 SADC

22 Situation de la transformation structurelle en Afrique Centrale: défis et opportunités

Employment • Employment in primary sector is dominant MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Emploi • Des gains de productivité négligeables suite aux mouvement s intersectori els du travail MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Emploi • Alarming levels of unemploy ment and underempl oyment MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Emploi • Unequal progress in youth litteracy MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Emploi • An improvement in enrollment rates, however much remains to be done: STEMs for industries 4. 0, education and targeted; etc; MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Société • The fertility rate is declining in the sub-region, which gives a big boost to structural transformation, but there are big differences between countries. MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Société Taux de dépendance 94 92 91 86 81 79 79 77 79 78 71 62 60 46 39 Pay sàr Pay eve sàb nu in term Afriq édia as r ire eve nu ue d u. N ord Afriq Ang ue S ubs et M ola oye n aha -Orie nt rien ne Bur und i Cam e rou n Rép ubli que Tch ad Cen traf rica Dem . Re p. du ine Con go Guin Gab on qua toria le ée E Rwa nda Sao Tom é et Prin c • As the dependency ratio in the sub-region gradually decreases, there are clear differences between the performance of different countries. MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités ipe

Société • The living conditions of most of the urban populations of Central Africa have improved considerabl y since the 1990 s MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Evolution of the GDP per capita in Central Africa over the past decades

Strategies to Accelerate Structural Transformation q. Attract more foreign and local Direct Investments q. Business environment (governance, rule of law, qfinancing, human capital, infrastructure, services, taxation, etc. ) q. Accelerate economic diversification, sophistication and complexity of exports through q local processing of products qthe creation of regional value chains q. Changing consumption and import habits q. Good urbanization planning MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Strategies to Accelerate Structural Transformation Making better use of urbanization in Central Africa q Establish links between cities and rural areas. q Take advantage of demand from cities to revitalize the agricultural sector; promote PCLs and CVRs Increase Competitiveness and Productivity. q Focus on education, science and technology q Promote entrepreneurship, innovation, R&D, etc. q Promote the digital economy and Revolution 4. 0 MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Strategies to Accelerate Structural Transformation • Maintain social stability with a better distribution of income and opportunities • More attention to poverty, inequalities, employment • • Strengthen sub-regional cooperation to: Development of infrastructure and industrial production zones accelerate the implementation of the Af. CFTA Resolve cross-border security crises at the regional level MAIN en TOPIC Situation de la transformation structurelle Afrique Centrale: défis et opportunités

Planning to achieve ST: experience of Singapour 35

i Below, an Inspirational quote highlighting the role of government in promoting transformation. From Mr Lee Kuan Yew, Founder and Prime Minister of Singapore: 1959 -1990 “Will Singapore be around in 100 years? I am not sure. Whatever the choices are, I am absolutely sure that if Singapore gets a dumb government, we are done for. This country will sink into nothingness” ECA/AHEGM 2018 | N’Djamena, 20. Sep. 2018 36 UNECA. OR G

Thank you