Editor's Note

Doubling down on progress

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On 4 June, South African investors were shocked by the news that the South African economy had shrunk by no less than 3,2% in the first quarter, the worst performance in a decade and far more than the 1,6% economists had initially predicted. Among the prime culprits for this disastrous performance are Eskom, which has undermined entire industries with its mismanagement, corruption, outdated facilities, and billions in debt, and policy uncertainty regarding land tenure, which contributed to a 13% contraction in agriculture. It is widely hoped that the South African Reserve Bank will cut the interest rate to assuage the damage.

Not all is doom and gloom, however. With the African Continental Free Trade Area (AfCFTA) coming into force, policymakers across the continent have a golden opportunity to develop and implement local strategies to grasp emerging options in manufacturing and industrialisation and increase the global competitiveness of the African continent as a result. As the Brookings Institute points out, only 10 African countries (Mauritius, South Africa, Seychelles, Morocco, Tunisia, Botswana, Algeria, Kenya, Egypt, and Namibia) are ranked currently among the world’s 100 most competitive countries on the 2018 Global Competitiveness Index.

“Given that an integrated continent will have a larger supply market, decreased trade restrictions, and free movement of people, manufacturing specialization will accelerate and make Africa’s industrialization globally competitive. As we have noted before, if the AfCFTA is successfully implemented, Africa’s manufacturing sector is projected to double in size with annual output increasing to $1 trillion by 2025 and create over 14 million jobs.”

Now is the time for public and private sector leaders to redouble their efforts to take Africa forward.

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