OECD/AUC report shows Africa has far to go on inclusive growth

Africa may have achieved good overall average economic growth figures over the past decade, but quality employment and impact on overall well-being remain elusive.

Though the region grew at a world leading average of 4.7% between 2000 and 2017, on current trends vulnerable employment in Africa will remain at 66% until 2022, according to new research from the African Union Commission and the OECD Development Centre.

This falls far below the African Union’s Agenda 2063 target of 41% by 2023. Today, 282 million workers remain vulnerably employed.

The findings underscore the fact that despite more than a decade of world-leading economic growth rates driven by debt relief, high commodity prices and diversification of core industries, achieving inclusive development across the region remains elusive.

“Women’s participation in the labour market remains low, and is inefficient. Inequality is clearly inefficient,” says Mario Pezzini, a director of the OECD Development Centre. “On youth inclusion, the jobs are not there, particularly when they move to cities. This represents a major issue that could have social consequences in terms of social explosion, as was the case in Tunisia.”

GDP per capita across Africa was also found to be much less correlated with indicators of well-being – such as education and health outcomes – than the world average.

This may be exacerbated in the future. Many countries may not be able to maintain current, relatively high levels of public investment as growth rates plateau and aid flows reduce due to political pressures in donor countries.

Internal revenue mobilisation from taxes can help plug the gap. Here, African countries have seen some improvement, especially compared with their peers in Latin America. Still, more work is needed before African countries come near to the OECD average of 35% of revenues from tax collection.