African policymakers must grow investment in R&D to sustain Africa’s economic structures and grow digitally – IMF report
May 6, 2021706 views0 comments
The International Monetary Fund (IMF), in a recent report, opined that for Africa’s development to be sustained, African policymakers must foster investment in research, development, and innovation (R&D&I) to reboot the continent’s economic structures and catch up technologically with the rest of the world. It consequently stated that innovation and the digital information and technology that follows development has become a necessary component of any effort to address the challenges of food security, health, education, energy, and competitiveness. It also pointed that unless African policymakers reap the potential benefits of research, development and innovation, the drive will continue globally. Though, the problem lies in the fact that innovation is talked about and debated in Africa but not strategized.
According to the study, Africa has enjoyed strong economic growth for most of the 21st century, but, the “Africa Rising” narrative that accompanied this growth is mostly a story of rising GDP, which is overly one-dimensional. The economic growth of the continent has failed to generate many good jobs, which now, is postponing the benefits of the demographic dividend of a large working-age population, that is supposed to free up resources that can be focused on inclusive development.
Despite all the economic and social devastation caused by the coronavirus pandemic, it has also given the African countries the opportunities to innovate and go digital, rebuild their economies with digitalization leading the way. The Fund also said that the civil societies, so far, seem more ready than policymakers in embracing digital technology.
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The report further noted that change has occurred in Africa over the last five years as it suggested in the report that the continent may be receptive to building instead of merely rebuilding while it identified three major initiatives in the continent that could become the game changers breathing life into the top-down dimension of going digital. They include:
The African Continental Free Trade Area (AfCFTA), which aims to create a single market with a combined GDP that exceeds $3.4 trillion and includes more than 1 billion people;
The South African government’s new Centre for the Fourth Industrial Revolution of the World Economic Forum (WEF), for dialogue and cooperation on the challenges and opportunities presented by advanced technologies;
The WEF’s Africa Growth Platform, which aims to help companies grow and compete internationally, leveraging Africa’s entrepreneurial activity—13 per cent higher in its initial stage than the global average.
While discussing the public policy place for the implementation of the initiatives towards the digital drive, the IMF noted that African policymakers must make the implementation of digital technologies an element of an ecosystem of innovation, as there’s no time to lose. However, well-calibrated regulatory frameworks, investment in infrastructure, digital skills, and financial inclusion must take priority as digital solutions cannot be achieved in a vacuum.