Interview : Vera Songwe
How is the adoption of technologies supporting economic development in Africa?
VERA SONGWE: In 2017 the mobile sector accounted for 7.1% of sub-Saharan Africa’s GDP. The mobile ecosystem supported 3m jobs and contributed almost $14bn to public revenues in the form of general tax and sector-specific levies on the consumption of mobile services. Beyond this there are significant opportunities use technology for inclusive economic growth, through sectors such as trade, agriculture, renewable energy, education and health. A robust policy framework, investment in infrastructure and capacity development are critical to supporting the technological revolution and maximising its benefits. UNECA’s Digital Centre of Excellence will help countries to harness the potential of the Africa’s digital economy, which is expected to reach $300m by 2025.
How can the African Continental Free Trade Area (CFTA) help to further deepen regional integration?
SONGWE: While ECOWAS has made significant progress on regional integration, its outcomes – that is, greater trade and development of regional value chains within ECOWAS – have yet to fully materialise. Over the 2013-17 period intra-regional trade within ECOWAS represented only about 10% of the region’s total trade with the world. The region exports only about 39% of its merchandise to the rest of Africa, which illustrates its potential to further penetrate continental markets.
By addressing the fragmentation of African economies, the CFTA should attract or create new business opportunities for ECOWAS member states and support further integration. The agreement’s broad scope moves it beyond the requirements of a traditional free trade area, and should scale up the integration of well-established regional economic communities. To that end, and building on current political momentum, the quick ratification – as Côte d’Ivoire has done – and effective implementation of the CFTA remain critical to fully realising the agreement’s benefits. In that regard, UNECA is supporting member countries to produce national competitive strategies to leverage the CFTA.
What is the main challenge Côte d’Ivoire is likely to face in addressing its infrastructure gap?
SONGWE: Infrastructure development constitutes one of the five strategies of Côte d’Ivoire’s National Development Plan 2016-20. Its implementation requires $22bn, or $4.4bn per year over the period. The main challenge for Côte d’Ivoire, like many developing countries, is in sourcing financing for infrastructure development.
While there is scope for borrowing resources, UNECA is working via its new private sector and finance division with member states on innovative ways of financing infrastructure. This support will include improving the structures of projects, as well as encouraging countries to look into local currency borrowing for long-term infrastructure funding. Leveraging the regional dimension will also be important for Côte d’Ivoire with regard to energy and transport projects.
Furthermore, with a tax-to-GDP ratio of 17.5%, there is room for Côte d’Ivoire to mobilise more resources from domestic sources by enhancing the efficiency of tax policy and administration.
To what extent can renewable energy sources promote the inclusion of rural populations?
SONGWE: While 92% of urban households in Côte d’Ivoire have access to electricity, only 38% of people living in rural areas have access. Furthermore, access to clean cooking fuels in rural households stood at just 19% in 2016. Thus, the development of renewable energy can lead to many benefits for people living in rural areas. The opportunities that renewable energy brings will yield significant benefits for economic inclusion, especially for women, who work predominantly in the agricultural sector. This will take the form of job creation in the renewables value chain and in small-scale enterprises powered by electricity, for instance.
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