UN Geneva - Multimedia Newsroom : UNCTAD Press conference: Economic Development in Africa Report

UNCTAD Presser 14 July 2022

23:30

MP4

1.6 GB

14-07-2022

Press Conferences | UNCTAD

UNCTAD Press conference: Economic Development in Africa Report - 14 July 2022

ENG

Shotlist Story

STORY: Report launch “Economic Development in Africa 2022” - UNCTAD

TRT: 3 mins 37s

SOURCE: UNTV CH

RESTRICTIONS: NONE

LANGUAGE: ENGLISH/NATS

ASPECT RATIO: 16:9

DATELINE: 14 July 2022, GENEVA, SWITZERLAND

SHOTLIST

Wide shot, UN Geneva flag alley.
Wide shot, Press room, UN Geneva.
SOUNDBITE (ENGLISH): Rebeca Grynspan, UNCTAD Secretary General: “The report makes clear the great potential for African countries to transform their economies through services, supporting the continents long standing economic diversification goals, boosting productivity and development”.
Mid shot, journalists with masks listening to the press briefing
SOUNDBITE (ENGLISH): Rebeca Grynspan, UNCTAD Secretary General: “In 2022 for the first time in more than 25 years, most of the African countries experienced a recession. This fall in economic activity produced a disproportionate effect on the poorest and most vulnerable segments of the population”.
Wide shot, laptops in the foreground, speakers at the podium behind
SOUNDBITE (ENGLISH): Rebeca Grynspan, UNCTAD Secretary General: “This is a continent with huge potential, the African Continental Free Trade Area is a huge opportunity. But to really make good use of that opportunity, countries have to take policies to diversify, they have to go on scale, they have to integrate, to be able to more successfully, you know, reap the opportunities and the value added that the international trade can give to the countries”.
Close-up, pan down from journalist taking notes
SOUNDBITE (ENGLISH): Rebeca Grynspan, UNCTAD Secretary General: “A recent analysis by the UN Global Crisis Response Group on Food, Energy and Finance which analyses the global economic shocks caused by the war in Ukraine, indicates that Africa, and especially sub-Saharan Africa, is now one of the worlds’ most exposed regions to the current crisis”.
Medium shot, journalists listening
SOUNDBITE (ENGLISH): Rebeca Grynspan, UNCTAD Secretary General: “The analyses we are sharing today provides convincing evidence that high value services, especially high intensity ones in ICT and finance are often the missing link that explain why diversification has not been achieved in the continent”.
Medium shot, speakers at the podium
SOUNDBITE (ENGLISH): Paul Akiwumi, UNCTAD Director, Division for Africa, Least Developed Countries: “Now this report outlines how technology can contribute in two ways to the diversifying economy: One, to support the diversification of the commodity sector as we know the traditional sector, and the second is to support small and medium size enterprises (SME)”.
Close up, journalists holding the report in their hands
Medium shot, participants listening to the briefing
Medium shot, laptop in foreground and podium with speakers in the background.
Medium shot, two laptop screens
Medium shot, journalist taking notes
Close up, journalist taking notes
Medium shot, journalist taking notes with laptop, camera next to him
Wide shot, Press briefing room with podium and journalists

African countries are urged to diversify their exports to better survive economic shocks such as the current global crises which are the consequences of the COVID-19 pandemic and the war in Ukraine. This is one of the key findings of the Economic Development in Africa Report 2022 published today by the UN’s leading institution dealing with trade and development (UNCTAD) in Geneva.

“The report makes clear the great potential for African countries to transform their economies through services, supporting the continents long standing economic diversification goals, boosting productivity and development”, said Rebeca Grynspan, UNCTAD’s Secretary General while speaking at a press briefing at the United Nations.

Despite decades-long efforts to diversify, 45 out of the continent’s 54 countries remain dependent on exports of primary products in the agricultural, mining and extractive industries.

“In 2022 for the first time in more than 25 years, most of the African countries experienced a recession”, resumed Ms. Grynspan. “This fall in economic activity produced a disproportionate effect on the poorest and most vulnerable segments of the population”.

The report entitled "Rethinking the Foundations of Export Diversification in Africa: the Catalytic Role of Business and Financial Services" outlines how African countries can rethink efforts to diversify their economies. According to UNCTAD’s Secretary-General, the continent has enormous potential to break commodity dependance and ensure its effective integration into high-end global value chains.

“This is a continent with huge potential, the African Continental Free Trade Area is a huge opportunity”. Ms Grynspan said. “But to really make good use of that opportunity, countries have to take policies to diversify, they have to go on scale, they have to integrate, to be able to more successfully, you know, reap the opportunities and the value added that the international trade can give to the countries”.

The African Continental Free Trade Area aims to create a single market for the continent’s 1.4 billion people and can boost export diversification.

As the world faces a cost-of-living crisis, 58 million people are just living above the poverty line in Africa and are at risk of sliding into poverty due to the combined effects of the COVID-19 pandemic and the war in Ukraine.

According to Ms. Grynspan, “a recent analysis by the UN Global Crisis Response Group on Food, Energy and Finance which analyses the global economic shocks caused by the war in Ukraine, indicates that Africa, and especially sub-Saharan Africa, is now one of the worlds’ most exposed regions to the current crisis”.

The report said that information technology and financial services cold be a game changer for Africa. But at the moment they account for only 20% of the continent’s services exports.

“The analyses we are sharing today provides convincing evidence that high value services, especially high intensity ones in ICT and finance are often the missing link that explain why diversification has not been achieved in the continent”, saidthe UNCTAD chief.

The report outlined how technologies can improve access to diverse and competitive markets both within and outside the continent and underscores the critical role of the private sector. This includes small and medium enterprises (SME), which account for about 90% of firms on the continent and employ around 60% of its workforce.

UNCTAD’s Director for the Division for Africa and the Least Developed Countries, Paul Akiwumi, explained that “this report outlines how technology can contribute in two ways to the diversifying economy: One, to support the diversification of the commodity sector as we know the traditional sector, and the second is to support small and medium size enterprises (SME)”.

UNCTAD also calls on countries to tackle other hurdles facing African SMEs, such as poor integration to regional and global markets to compete with large public and private firms.

-ends-

Teleprompter

Mercy the confirms the press so like publication develop more economic on Africa.

This report is on the embargo until 12:00 PM.

Yes, 12 noon, Geneva time after the press, this press conference, first I will give the floor to Secretary General Greenspan, Secretary General of Hotel.

Then we'll have a comment and additional details on the report by Paul Akiwumi, who is the Director of the Division for Africa, LDCs, these developed countries and special programmes.

And we'll open the floor for your questions.

You are online and in the room.

Thank you for those who are popped up physically in the room over to you.

[Other language spoken]

Good morning to all of you.

Thank you for joining us for the launch of the Economic Development in Africa Report 2022.

I would like to start really by thanking Pollack Women and his exceptional team for the latest report, the last in a series which stretches over 20 years and provides unique world class analysis for African economies.

The report makes clear the great potential for African countries to transform their economies through services supporting the continent's long standing economic diversification goals, boosting productivity and development.

This is an especially timely and important publication given the current contacts, which threatens millions of Africans with rapidly rising food and energy prices as well as turbulent financial markets.

In 2020, for the first time in more than 25 years, most of the African countries experienced a recession.

This fall in economic activity produce a disproportionate effect on the poorest and most vulnerable segments of the population.

Various pandemic related lockdowns and social distancing measures, as we know, severely affected the business activity of the informal sector, which provides jobs for the poorest social groups.

But even before the pandemic, African countries were struggling to create good jobs, quality jobs and reduce poverty and inequality.

A recent analysis by the UN Global Crisis Response Group on Food, Energy and Finance, which analyses the global economic shocks caused by the war in Ukraine, indicates that Africa, and especially sub-Saharan Africa, is now one of the world's most exposed regions to the current crisis.

One out of two Africans.

That means over 6 million people are severely vulnerable to food, energy and finance shocks all at once.

This is why Africa must diversify its economy, become more resilient.

We believe that the continent must use every opportunity to achieve economic diversification through services and it must seize the potential of the African Continental Free Trade Area.

This is the call we are making today.

Commodities still account for more than 60% of total merchandise export in 45 African countries.

Export diversification remains elusive in over 80% of countries in the region, making them highly vulnerable to price fluctuations in global economic shocks because of commodity dependence.

In the last 20 years, only half of the African countries have added new products to their export baskets.

The analysis we're sharing today provides convincing evidence that **** value services, especially **** intensity ones in ICT and finance are often often the missing link that explain why diversification has not been achieved in the continent.

Traditional services such as travel and transport dominate service trade.

These two sectors alone represent more than 2/3 of the total services trade and make the greatest contribution to Africa's trade in value added.

However, structural barriers limited the development of **** value added services trade.

These barriers include **** cost of service trade, protectionist measures, lack of adequate infrastructure and equipment, low levels of digitalisation, technology uptake, access to financial services and most importantly, low levels of regional integration.

In a limited competitive environment, the African Continental Free Trade Area can be a great opportunity for the continent.

A to become a crucial driver and become a crucial driver of economic growth, industrialisation and sustainable development in Africa.

In the long run, trade liberalisation will allow firms to access a large continental market and gain from economies of scale.

The region urgently needs adequate policies to specially strengthen the services sector, which can provide innovative and efficient ways of device diversifying and transforming African economies.

Catalytic financial services, including Fintech that facilitate finance into small and medium sized enterprises and startups are necessary not only for inclusive growth but also to enter new markets, diversify exports, upgrade productive activities and improve competitiveness.

Enhancing the complexity and diversify of African exports will require increasing linkages between services and the manufacturing sector and boosting entrepreneurship and the creation of new products.

Let me just conclude by saying this, we believe in the potential of the African continent, but we know now make a strong call to make diversifying economies an African priority.

It will be the only way for the region to achieve sustainable growth, to give the young people of Africa an opportunity for **** quality jobs and most importantly, withstand the severe economic shocks which may come in the future in which we are already already seeing today.

[Other language spoken]

Thank you very much for lucky with me.

Please over to you.

Yeah, thank you very much and thank you very much Secretary General.

I would just like to add a few elements to what the Secretary General mentioned, because she made a comprehensive assessment of the report.

I think what the Secretary General says, this is an exceptional report and it, it is indeed an exceptional report.

We have been talking about diversification as long as I can remember and how Africa needs to diversify its economies.

And, and the fact is, is that we've been looking at it through the lens of diversifying within the commodity sector.

And now it is also very timely because of of of technology and how technology can contribute to the diversification of the economy.

Now this report outlines how technology can contribute in two ways to the diversifying the economy.

One to support the diversification of the commodity sector as we know it, the traditional sector.

And the second is to support small and medium sized enterprises.

And when I talk about Smas here, I'm not talking about the low the the usual traditional cottage enterprises.

I'm talking about Fintech financial initiatives.

I'm talking about healthcare, Fintech with regard to healthcare.

I mean, in Africa right now, we should, we should not say that this report is going to stimulate it, but it needs to upscale it and provide the regulatory frameworks for this, for these initiatives.

Right now in Africa, there are many initiatives going on with regard to technology in healthcare, you have online pharmacies going on, you have affordable dialysis clinics going on.

In the fintech area, you have transfer funds, not only transfers funds within countries, but transfer funds across borders.

[Other language spoken]

You have also in addition the Fintech is most important for Africa because it includes financial inclusion and especially financial inclusion of women.

And you also very much have Agrotech, which is very much important for small and medium sized agriculture where technology is used to be able to tell the farmers the weather, to be able to learn when to plant, to provide them with seeds, provide them fertilise as equipment and not and most importantly storage and the markets.

And of course you have very much a lot of technology in the energy sector as we know, but also E mobility is a big thing now in Africa.

Rwanda is a case, Kenya is a case everywhere.

It's beginning to grow.

And as the Secretary General says, this is critically important not only for diversifying the economy, but providing decent jobs.

Africa has a growing middle class, educated middle class who need decent jobs and these type of of small and medium sized enterprises provide **** skilled jobs.

Operational officers, finance officers, government liaison relations officers, software engineers, HR managers, administrators, accountants, these are **** skilled jobs which the continent requires and needs now.

Now what is happening in Africa today is that there are there is a need for financial mechanisms and new era of financial mechanisms because the commercial banks do not cater for small and medium sized enterprises in with regard to startups.

So there is a need for private equity and venture capital firms to come in and in fact some are already coming in.

And if you look at some of the data, we see 2019-2020 1.91 point $9 billion.

And then in 2020 there was over $4 billion from private action venture capital firms.

And now as of May this year, we already have $2.7 billion invested in venture capital firms, I mean in small start-ups in in Africa.

So this is very critical.

But what can the government do?

And the second general says this very clearly that the government needs to provide the platforms and needs to provide the regulatory frameworks, needs to provide the financial frameworks and needs to provide more support to these SM ES in training and capacity building.

And lastly of course they need to implement African continental free trade area because this provides the scaling up throughout the continent.

1.4 billion people can be involved in this in in the endeavour.

And most important of all is the is the investment protocol of the Continental Free Trade Agreement, which allows for movement of money within the country, which allows for firm to take a state to arbitration and which allows for movement of money outside the continent.

So these are critical elements of this.

So let me stop here and I can take any questions if they are.

Thank you very much.

Thank you very much Pollock.

The floor is open for questions.

Jamie, over to you.

Please indicate your name and and the name of your media, please.

Of course.

[Other language spoken]

My question has to do with you mentioned what African countries can do.

You mentioned venture capital and, and, and private sector commitment.

What about developed countries?

What kind of role should they have to help spur this diversification of, of, of, of of talent and, and, and resources and economies across Africa?

[Other language spoken]

Thank you very much.

[Other language spoken]

I mean, there, there's a lot of discussion about, about development in Africa.

Let me start off very broadly and the need for more ODA, which is essential, but one must recognise that countries have not developed with ODA alone.

So it's important that the African countries do their bit as well.

But certainly overseas development assistance is important and it's important with regard to technology transfer, it's important with regard to training and it's important with regard to assisting with African countries in developing the regulatory frameworks that are standardised globally so that these transactions are not can happen globally throughout the continent.

Right now many countries are choosing where they want to go with regard to specialising in this area of, of Fintech.

And I can give you Mauritius for example, as as as selected Fintech as an area they want to concentrate on and they have diversified their their economy considerably.

And in Fintech there they are receiving the monies that are coming through venture capital firms and private equity to Africa, Eastern and Southern Africa are coming through Mauritius because they have reached the, the international standards that are required for the movement of money, for the monitoring of money and for the accountability of funding there.

So in in a broad shell that that's what what they can do.

And of course, lastly is the European Union has a lot of experience in how the Union was established and how it was implemented.

Certainly their their advice and contribution to assisting the African Continental Free Trade Area in actually gaining momentum and moving in the right direction is certainly valued.

[Other language spoken]

Me add yeah, I think that there are there are things also at the at the more international level with respect to to the international financial system, yes, we need coordinated policies at the international level because if they are not coordinated, what happens is what we are seeing right now.

Yes, the central banks of the developed countries are raising interest rates that are making, you know, financing for the continent much more expensive and are putting some of the countries on the verge of problems with respect to debt repayments.

[Other language spoken]

And that in itself is a very important point that, you know, the countries can do a lot themselves, but if the international framework is not conducive, you know, and will hit them again and in a way will limit their fiscal space and in their in their their financing space.

So it's very difficult to do all the things that they have to do.

So I think that that's that's a very important point.

You know, we need to develop countries which voice is so important in the international, in the international with the international institutions, financial institutions, we need them to have a voice on their board.

Yes and and flexible make flexible financing possible, long term financial possible for the investments that the countries have to make for diversifying their economy.

I think that the other point that Paul really touch up and that is very important is the technology transfer.

And this is, this is key, yes, and we need much more of it than in better ways for technology transfer, if for the developing countries, especially for Africa.

And the other point, Paul, I, I would, I would say it's also aid for trade.

We need open trade and we have a lot of obstacles still in the trade area.

And we have seen how during the, the pandemic, yes, the export restrictions and, and, and really disrupted a lot of what the countries needed to do to, to face the pandemic.

So I think that those are three big, let's say, parts of the puzzle that that the developed countries can do.

And obviously climate financing, because, you know, the, the, the transformation that is needed for sustainable development is really huge.

So that climate financing will have to come from public sources and also from private sources, but we will need a combination, and climate financing can play a key role in the transformation and diversification of many of these economies.

Thank you very much.

I don't see any questions online nor in the room.

[Other language spoken]

I guess, yeah, I mean, you did mention ODA, right?

And I mean, I guess what I was trying to maybe follow up on, you know, has ODA in the history been sort of a double edged sword in some ways in the sense that it maybe could have limited development or have sort of precluded, you know, other sources of financing?

If you could kind of break it down in terms of what specifically, and I'm thinking about the United States in particular, I mean, which you know what, what could the United States specifically do to help?

Develop, you know, help help Africa along this path.

Yes, well, thank you very much.

Let let let me just take a recent, some recent news that's just happened in the G7 or the G20G7 met and they established this infrastructure fund since I think it's 600 billion, if I'm correct.

And as the Secretary General mentioned also infrastructure, technology and infrastructure is critical because when you go into the final, the technology side, you need the broadband, you need to have the technology and the infrastructure there.

And this is something that the, the, the, the donors can focus on providing the necessary infrastructure.

There is no point having, as you hear often many countries claim that they have most of their populations using mobiles.

But when they're working on G3 and you can't really use it for productive development of to, to, to actually work with businesses, it, it's a problem.

So there's still a huge divide, technology divide, but one of the key thing elements is infrastructure.

So it's it's it's pleasing that that the G7 can come up with this fund.

It's critical for for Africa and other developing countries, at least developed countries so that they can certainly move forward.

[Other language spoken]

So maybe we will stop here as you maybe you want to conclude and give a final word on the on this report and we.

Yes, read it.

That's my final word.

[Other language spoken]

This is a very good report.

It really touches upon very important areas for the African countries.

This is a continent with huge potential.

The African continental Free free trade area is a huge opportunity, but to really make good use of that opportunity, countries have to take policies to diversify, they have to go on scale, they have to integrate to be able to more successfully, you know, reap the opportunities and the value added that the international trade can can give to the country.

So this is a wonderful report.

Again, congratulations to the team.

[Other language spoken]

This is really, you know, a great contribution to the thinking and to the analysis and to the policy recommendations for the African continent.

Thank you very much.

Thank you very much, Mr Akiwomi.

The press kit is available in The Newsroom.

You have video and the podcast and the embargo until 12, as well as the whole press kit.

Please don't hesitate to contact the team.

There's a full team behind Paul Akiwumi on this report in many languages, so we are happy to answer your request for interviews and see you soon.

[Other language spoken]