Africa’s rise is in danger of faltering. After years during which the continent’s economy grew at an average annual rate of 5%, global uncertainty, depressed commodity prices, and jittery external conditions are threatening to undermine decades of much-needed progress. Ensuring the wealth and wellbeing of the continent’s residents will not be easy; but there is much that policymakers can do to put Africa back on an upward trajectory. Okonjo-Iweala First and foremost, policymakers must secure the financing needed to pursue sustainable development in an uncertain global environment.

The World Bank estimates that Africa will require at least $93 billion a year to fund its infrastructure needs alone. Climate-friendly, sustainable infrastructure will cost even more. And yet, as long as global growth remains weak, Africans cannot count on developed countries to fully honour their commitments to help attain the Sustainable Development Goals. Support Project Syndicate’s mission Project Syndicate needs your help to provide readers everywhere equal access to the ideas and debates shaping their lives.

Learn more Africa must rapidly develop its own resources, beginning by nearly doubling tax revenues. Across Sub-Saharan Africa, tax revenues account for less than one-fifth of GDP, compared to more than one-third in OECD countries. This means there is plenty of room for improvement. From 1990 to 2004, for example, Ghana reformed its tax system and raised revenues from 11% to 22% of GDP. Admittedly, such progress is difficult; in Nigeria, we saw an opportunity in raising non-oil tax revenues, but struggled to seize it.

Another source of domestic resources is the roughly $380 billion in pension assets held by just ten African countries. Policymakers should be leveraging these considerable sums. At the same time, African countries will have to find a way to diversify their economies. Diversification requires investment in the future, in the form of education and well-developed infrastructure, including telecommunications, power, roads, rail, and water. There are plenty of models to follow: Dubai, Singapore, Thailand, Malaysia, Mexico, Indonesia, and South Korea are all admired by Africans as economies that managed to transform themselves.

Dubai, for example, set out more than three decades ago to prepare for a future without oil. The government implemented a step-by-step transformation of the country into a service economy, putting in place the infrastructure and incentives necessary to build up financial services, tourism, medical services, real estate, media, arts, and culture. South Korea and Singapore, which had few natural resources on which to rely, are no less inspiring. The secret behind these countries’ success is relentlessly focused leaders, whether entrenched but benign dictators or democratically elected politicians with a shared vision of a broad-based economy.

Sub-Saharan Africa has paths for diversified growth that many of the trailblazers did not: value-added agriculture and agro industry, the processing of mineral resources, petrochemical complexes, manufacturing of durable and consumer goods, tourism and entertainment, and an emerging information-technology sector. As the necessary measures for diversification are implemented, policymakers must ensure that the economic growth they are pursuing creates jobs. Sadly, this has not always been the case. Much of the recent growth has benefited only a few, leaving many behind – most notably young people and women.

From 2006 to 2013, inequality rose in many of the continent’s most important economies, including South Africa, Nigeria, Ghana, Tanzania, and Rwanda. These were challenges that we were starting to address in Nigeria when I was finance minister. We knew that we needed not just to secure growth, but also to improve the quality of that growth. To that end, policymakers must ensure that growth is channeled into sectors that create jobs, such as agriculture, manufacturing, and services.

They may also have to redistribute income and strengthen social safety nets to protect better those at the bottom of the ladder. Matching skills to job opportunities will be crucial. Some 70% of Africa’s population is under 30, and the continent is home to half the world’s primary-school-age children who have been deprived of the opportunity to study. Offering Africa’s children basic reading, writing, and technology skills, as well as vocational, technical, and entrepreneurial training, must be a top priority.

Weak health-care systems must also be strengthened in order to tackle the endemic diseases that sap productivity, such as malaria, as well as improving preparedness for outbreaks of deadly epidemics. The stakes are high. The World Bank estimates the Ebola outbreak shrank the economies of Sierra Leone, Guinea, and Liberia by 16%. As the world economy sputters, African countries will have to develop trade with one another.

In 2013, African goods and services accounted for just 16% of trade within the continent, and just over 3% of world trade. One problem is that most African countries produce the same type of commodities and trade them with very little value-added. Policymakers must encourage greater specialization; differentiated goods and services will add value and volume to trade. Logistics pose another obstacle to intra-African trade. Policymakers must make it easier to move goods across borders, by improving connectivity between countries and reducing bureaucratic hurdles and administrative costs.

For example, road transport tariffs across Africa are estimated at $0.05-$0.13 per ton-kilometer, compared to the average of $0.01-$0.05 for all developing countries. The Rift Valley Railway project, which will eventually link Mombasa on the Kenyan coast to Kampala in Uganda, is a good example of the benefits that investments in transportation could provide. The African Development Bank estimates that it will double the volume of trade between the two countries, while reducing marginal costs by 30%.


As they make these investments, policymakers must not forget that much of Africa’s recent growth can be credited to good macroeconomic policies and sound economic management. Extending the continent’s rise will require strengthening the continent’s economic fundamentals. This means ensuring that prices in the economy are correct, starting with the exchange rate. Some countries may need temporary controls to curb damaging capital outflows, but policymakers should aim for a market-based exchange rate and a solid plan for governing inflation, debt, foreign-exchange reserves, current accounts, and fiscal balances. Africa’s potential can hardly be overstated.

The continent is well placed to build diversified economies based on low-carbon, sustainable infrastructure. But policymakers cannot simply assume that Africa’s rise will continue. They must take the right steps to ensure that it does. Ngozi Okonjo-Iweala is a former finance minister and foreign minister of Nigeria, a former Managing Director of the World Bank, and a distinguished visiting fellow at the Center for Global Development.

Read more at: http://www.vanguardngr.com/2016/03/how-policymakers-can-put-africa-back-on-upward-trajectory-by-ngozi-okonjo-iweala/

This woman na Brian. We miss you ma'am

why didn't she put Nigeria on "upward tragectory"when she was in charge of the finance ministry? instead we had wanton looting of billions of dollars right under her nose. Witch

we miss u.

TCD:
why didn't she put Nigeria on "upward tragectory"when she was in charge of the finance ministry? instead we had wanton looting of billions of dollars right under her nose. Witch

At least she did better than Pmb and kemi are doing now.

TCD:
why didn't she put Nigeria on "upward tragectory"when she was in charge of the finance ministry? instead we had wanton looting of billions of dollars right under her nose. Witch

she is 100 times better than 'olodo' kemi

THE ONLY PERSON THAT CAN STAND OR TALK WHEN THIS WOMAN OF WISDOM TALKS IN PMB'S CABINETS IS THAT MAN FROM ABIA STATE, EVEN AT THAT HE IS A LEARNER COMPARED TO MAMA NGOZI. THAT FAKE OYINBO CUM CRIMINAL FROM OGUN STATE IS THE WRONG CHOICE FOR THAT POSITION. WE NEED TO TELL OURSELVES THE TRUTH, SHE HAS NO INTERNATIONAL LEVEL, ONLY ENGLISH SHE SABI, ABI NA ENGLISH WE WAN CHOP


GO TO THE SOUTH SOUTH OR SOUTH EAST TO PICK SOLID ECONOMIST THERE.

without sentiment i can say this woman z one of the brainbox in nigeria abi i lie?

TCD:
why didn't she put Nigeria on "upward tragectory"when she was in charge of the finance ministry? instead we had wanton looting of billions of dollars right under her nose. Witch

We can see how strong the economy has become now that she's gone...

Montaque:

At least she did better than Pmb and kemi are doing now.

keep quiet.

She was there as Minister of finance that supervised wanton looting of the national treasury. What did the nation achieve under her especially when crude oil sold for $120 per barrel?

Absolutely nothing! Yet iPod fools want us all to believe the IMF puppet is the best thing on earth, that's why they are constantly looking for faults with the new Minister and PMB who are cleaning up her mess of over 6yrs.

puff puff woman.



Abeg, click my signature to see the 7 Things Guys Should Learn From A Lion

Montaque:

At least she did better than Pmb and kemi are doing now.

Blizzy9ja:
We can see how strong the economy has become now that she's gone...

Montaque:

At least she did better than Pmb and kemi are doing now.

It is PMB and kemi that caused the crash in the price of oil right?

When this silly woman was finance minister for many years oil prices were way high over $100. She and the ineffectual buffoon refused to plan ahead and diversify our economy. like oil will last forever

we are paying for the price of their stupidity now.

Blizzy9ja:
We can see how strong the economy has become now that she's gone...

sometimes I wonder how illiterates like you manage to know how to type on nairaland.

The downward slide in the economy started under her watch cos she failed to diversify the economy and even save from the excess crude reserve which she and her cohorts looted.

Now that global oil price has fallen with oil being the only thing your country exports, freaks like you expect buhari to use a magic wand to rectify the situation.

Blame your goddess for failing to do what's right. The only thing that makes you all think she's better is because she's an Harvard graduate. Harvard on paper.

Montaque:

At least she did better than Pmb and kemi are doing now.

Blizzy9ja:
We can see how strong the economy has become now that she's gone...

Montaque:

At least she did better than Pmb and kemi are doing now.

It is PMB and kemi that caused the crash in the price of oil right?

When this silly woman was finance minister for many years oil prices were way high over $100. She and the ineffectual buffoon refused to plan ahead and diversify our economy. like oil will last forever . In this article she claims dubai started more than 3 decades ago to prepare for a future without oil... so she knew all these yet she and her boss preferred to prepare for a future without oil for their families alone by looting us dry and sharing 2.1billlion dollars and disappearing 20billion dollars from NNPC.

we are paying for the price of their stupidity now.

yeah right. like you put Nigeria on a perpetual reverse gear while u were minister of finance. olodo rabata.

TCD:


It is PMB and kemi that caused the crash in the price of oil right?

When this silly woman was finance minister for many years oil prices were way high over $100. She and the ineffectual buffoon refused to plan ahead and diversify our economy. like oil will last forever

we are paying for the price of their stupidity now.

Yes! If he was really prepared and competent enough for the job, a fall in the price of oil shouldn't be a problem... I can rmbr he waited for 6 whole month to put "sqaure pegs in sqaure holes" besides I heard he's still searching for oil in the North East... Yeye dey smell

You just gotta accept it, no one in PMB's cabinet comes close to NOI,s pedigree in terms of handling the economy

My comments are reserved.

Infact NOI Nigeria won't appreciate you like this is just like more of publicity stunt.
Why don't you forget about Nigeria and focus on advancing your career which will be more needed and appreciated in ****

Blizzy9ja:
Yes! If he was really prepared and competent enough for the job, a fall in the price of oil shouldn't be a problem... I can rmbr he waited for 6 whole month to put "sqaure pegs in sqaure holes" besides I heard he's still searching for oil in the North East... Yeye dey smell

You just gotta accept it, no one in PMB's cabinet comes close to NOI,s pedigree in terms of handling the economy

With this statement obviously you don't know Jack shit . fall in oil price shouldn't be a problem for a country who our whole sustenance is basically on oil and it's price? Do you think it is magic? PMB he should perform miracle abi?

Even better economies like Russia, Egypt and some Arab countries are already feeling the pinch with the oil price fall.

NOI and her crew had many years to prepare for the inevitable fall in oil prices but they did not they rather supervised indiscriminate corruption. I wonder what idiotic pedigree you are talking about.

bloodyBLOGGER:
sometimes I wonder how illiterates like you manage to know how to type on nairaland.

The downward slide in the economy started under her watch cos she failed to diversify the economy and even save from the excess crude reserve which she and her cohorts looted.

Now that global oil price has fallen with oil being the only thing your country exports, freaks like you expect buhari to use a magic wand to rectify the situation.

Blame your goddess for failing to do what's right. The only thing that makes you all think she's better is because she's an Harvard graduate. Harvard on paper.

Yes ur cattle rearer of a president is divisifying the economy by spending more money searching for oil in the NE... Forget abt d Harvard training that she's got, she's way better than any1 on the dullard's cabinet dats why she's in hot demand world over.

Conceptual workers are different from transactional workers.
One category na officers dem be while the other na clerical grade be their own.
Oya make una dey put our people dem for each category

[b] Madam Theory is here again! Talk is cheap: what policy did you enact and implemented throughout your stay at the helm of Nigerian's financial affairs apart from empty reserves and indebtedness?

It is crystal clear that if proper policy has been put in place during your administration in GEJ's cabinet, Nigeria won't be suffering from economic collapse all of a sudden.

This is an over-hyped economist who lacks cognitive ability to diversify Nigerian economy nor manage our resources effectively during the period of oil boom is here again.

She borrows to pay FG workers till the end of GEJ's tenure - http://www.pmnewsnigeria.com/2015/05/06/fg-borrows-n473bn-to-pay-salaries-okonjo-iweala/ just the same way the gigantic stealing of public funds happens under her nose coupled with ineffectual buffon.

JP Morgan has no regards for her poor economic decision during her tenure - http://investorsking.com/jpmorgan-poor-economic-decision-by-okonjo-iweala/


Madam, keep your solution to yourself: Nigerian problem is beyond your professional wherewithal.[/b]

Well done ma. Please help anut kemi on Econs 101, it seems she is lagging on the basics.

Anut kemi thank me later, lol.

lot of inexperience people at the state house of assembly making silly decision that we end up not benefiting from

TCD:
why didn't she put Nigeria on "upward tragectory"when she was in charge of the finance ministry? instead we had wanton looting of billions of dollars right under her nose. Witch

It will do you more good, if you take off those scales of tribal sentiments from your eyes. She accounted for every money under her watch. Or is it her fault that dasuki diverted money meant for arms deal? There was no budget of corruption under her watch. That woman na bomblast jare





I dislike NOI a lot, but comparing kemi to her is like comparing Alomo and Hennessy.

You cannot compare & contrast them. Verily verily NOI na bomb blast.

Zombie take over

Too long mhen! Bu I trust okonjo ur a legend ma!

Pls ma come and save our economy we need u bubu don,t kw to grow the economy he is just touring around the world ma we re sorry for our mistakes

Montaque:

At least she did better than Pmb and kemi are doing now.

Don't you think this is a meaningless statement?. "...did better than two people are currently doing...". She was in office for 16 years and she left this mess. Yet she did better than a less than one year old government. Na wa. This Nigerian attribute of sentiment and fear of truth is going to finish this country

The beauty of Israel is slain upon thy high places: how are the mighty fallen!

Teacher teach me nonsense