- Integrate Africa’s economies
- Uplift the welfare of Africans and strengthen efectiveness and capability of institutions
- Build Healthy National and Regional Food Systems and Culture and Empower Rural Communities
- Facilitate access to affordable and sustainable energy
- Promote Climate Resilience, Environmental Protection and Sustainable Management of Natural Resources
- Advance African economies scientifically and technologically, intensify generation and application of knowledge and innovation
Integrate Africa’s economies
In March 2018, African countries signed the landmark African Continental Free Trade Agreement (AfCFTA), which commits countries to remove tariffs on 90% of goods, gradually liberalise trade in services and address a host of non-tariff barriers. AfCFTA will make Africa the largest free trade area in the world, with more than 1 billion consumers and a Gross Domestic Product (GDP) in excess of US$3 trillion. AfCFTA goes far beyond the remit of traditional free trade areas (FTAs), as it includes trade in services, investment, intellectual property rights, competition policy and e-commerce. AfCFTA is complemented by other continental initiatives, which advance efforts to integrate Africa’s economies. Among these are the Protocol on Free Movement of Persons, Right of Residence and Right of Establishment, and the Single African Air Transport Market (SAATM), all of which constitute priority projects in the FTYIP of Agenda 2063, the implementation of which AUDA-NEPAD will facilitate during the period of this Strategic Plan. It is expected that intra-Africa exports, as a percentage of total exports, will grow from the present 17% to levels comparable to that of Europe (69%), Asia (59%) or North America (31%). The ECA has projected that, through the removal of tariffs on goods alone, there will be an increase in the value of intra-African trade by between 15% (or US$50 billion) and 25% (or US$70 billion) in 2040, compared to a situation with no AfCFTA in place. Alternatively, the share of intra-African trade will increase by nearly 40% to over 50% between the start of the implementation of the reform (2020) and 2040.
In promoting the integration of the continent’s economies, AUDA-NEPAD expects that industrialisation will significantly promote export diversification to reduce reliance on rents from the extractive industries; and that it will grow small-and medium-scale entreprises (SMEs) and enable African countries to break into new markets on our continent.
AfCFTA will stimulate demand for intra-African food imports, improve export sophistication across the continent by enabling more countries to integrate regional and global value chains and consequently increase the quality of exports.
In order for AfCFTA to fulfil its enormous potential in diversifying and transforming African economies, countries will need to develop effective policies and strategies for exports, as well as identify new opportunities for diversification, industrialisation and the development of value chains. In order to achieve this, however, AfCFTA will require complementary policies and a strong focus on achieving tangible outcomes from other initiatives such as the Boosting Intra-African Trade (BIAT) Action Plan. BIAT offers a framework for addressing key constraints to intra-Africa trade and diversification under seven clusters: trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade finance, trade information, and factor market integration. Particular attention will be needed on trade facilitation and the building of production capacities. African countries are already strategising on how to benefit from the agreement and are developing plans of action to take advantage of national, regional, and global markets in the AfCFTA context.
In pursuance of these objectives, AUDA-NEPAD will support initiatives under AfCFTA, BIAT, SAATM in order to foster African economic integration and industrialisation.
Uplift the welfare of Africans and strengthen effectiveness and capability of institutions
Investment in human development is the backbone of the health and productivity of an economy’s workforce. Such investment advances life expectancy, raises access to high quality education and leads to growth in incomes. These are vitally important for uplifting human welfare. Human development requires capable, effective, efficient and responsive institutions in all sectors of society and the economy – public sector, private sector, academia, non-governmental, inter-governmental, regional and continental institutions. Our continent is investing significantly in human development and building responsive institutions to meet the capacity requirements of Agenda 2063. This investment is producing results, which AUDA-NEPAD aims to build on. Significant public health improvements have been made in recent decades, leading to a substantial decline in maternal and child mortality, and the incidence of chronic malnutrition among children under five. African countries are making good progress on preventable childhood illness and communicable diseases. Although, HIV/AIDS and malaria continue to have a detrimental impact on development, treatment options are improving and are today increasingly widely available.
The share of people living in extreme poverty is declining, and for a greater number of countries, the outlook for poverty eradication is very positive. For instance, Ethiopia is on the path to eliminating extreme poverty by 2050. However, the concentration of poverty remains high: some 40% of our continent’s extremely poor are projected to be in Nigeria and the Democratic Republic of Congo by 2040. This means the challenge of eradicating poverty in all our countries is far from over. Response to this challenge is an area of intervention by this Plan over the next four years.
The number of children enrolled in primary school has increased. Adult literacy rates are up by almost 10% from two decades ago, and the gender gap in literacy is shrinking, partially driven by massive improvements in gender parity in school enrolment, except in Science, Technology, Engineering and Mathematics (STEM) education. Africa leads in some areas of gender equality. For example, in 11 African countries, women hold almost one-third of parliament seats, more than in Europe and the United States. Citizens, women and workers are receiving greater autonomy and power throughout the continent because leaders have begun to recognise the need for inclusive participation. As a result, welfare and life expectancy are rising. There is today an expanded space and scope for the private sector and our development partners to join governments in the fight against diseases through technological innovations and initiatives to strengthen healthcare systems.
AUDA-NEPAD aims build on these achievements and strengthen the effectiveness, efficiency and responsiveness of institutions, and promote efforts to invest in capacity building and skills development. Very importantly, it will lead to the empowerment of the continent’s vulnerable populations.
Build Healthy National and Regional Food Systems and Culture and Empower Rural Communities
Africa’s population is at present at about 1.2 billion people. Despite the increasing rate of urbanisation, more than 60% of this population lives in the rural areas. The rural economy remains heavily dependent on agriculture as the main source of employment and livelihood. More than 32% of our continent's GDP comes from the agriculture sector. Agriculture is central to our continent’s food systems and constitutes the means to transform the rural economy and empower rural communities. Despite its significance, however, agriculture on our continent is still faced with surmountable challenges along virtually all segments of its value chain. Prominent among these are agricultural land ownership; infrastructure, including irrigation facilities; financing; transportation; storage and access to markets. Sustainable food systems are critical to the health and wellbeing of households and communities. Agenda 2063, as well as regional and national development strategies and plans provide for renewed efforts to enhance food systems through the indigenisation of such systems; waste reduction in the value chain; support for emerging farmers to gain fair and equitable access to markets; and the practice of smart agriculture and more sustainable forms of production, among others. The current state of food systems in Africa is challenged by a number of factors. These include:
- Ownership of agricultural land is still by privileged elite groups, to the detriment of the majority of people, especially women, who produce the bulk of Africa’s food.
- Supermarkets and commercial entities dominate and control the food market and earn much of the value of products, compared to the farmers.
- Peasant farming remains predominant, largely seasonal, and with low productivity. This is improving, however, as farmers have greater access to modern farming technologies and practices.
- There is a need to step up specialised skills development in agriculture considerably, and invigorate interest in agriculture as a career, especially among youth.
All these call for a significant shift in the continent’s food value chain to localise food systems, change market systems that do not give adequate value to poor farmers and producers, and provide additional resources for research and development to step up the application of science, technology and innovation in the food and agriculture sector.
With women making up more than 50% of Africa’s population, 80% of whom reside in rural communities and with over 60% of the continent’s population employed in the agriculture sector, there is a strong imperative to empower rural communities. Incentivising rural agriculture and providing infrastructure will lead to the transformation of rural communities on our continent. This Plan will contribute to ongoing efforts to address the limited access to quality social services, infrastructure deficits, affordable and sustainable energy, labour-saving technologies and programmes which cater to the reproductive health of women and reduce the burden of care on our women and girls.
It is worth noting that Africa is responding decisively to the challenges of agricultural transformation and rural empowerment. In 2003 in Maputo, Mozambique, African leaders and governments committed themselves to driving agricultural transformation through the Comprehensive Africa Agriculture Development Programme (CAADP). This commitment was renewed in 2014 in Malabo, Equatorial Guinea. With the support of AUDA-NEPAD, countries and RECs have domesticated the CAADP framework through national agriculture and food security investment plans and strategies and taken forward the Malabo commitments. These frameworks have clarified what needs to be done across Africa, at regional level and within Member States to provide the impetus for Africa’s agricultural transformation. AUDA-NEPAD will work with stakeholders to continue to drive agricultural transformation results, improve food systems and empower the rural communities that are in dire need for infrastructural support services.
Facilitate access to affordable and sustainable energy
Africa, in particular south of the Sahara, has the lowest energy access rates in the world. Electricity reaches only about half of our population and clean cooking energy is accessed by only a one-third.8 What this means is that some 600 million people lack access to electricity and about 890 million cook with traditional fuels (IEA, 2018). Thirteen countries on our continent have less than 25% access, compared to only one in Asia (World Bank, 2018.). Our economic growth was estimated at 2.8% in 2018, compared to 7.1% in South Asia (IMF, 2018). Lack of access to energy is a major constraint to economic growth and sustainable development (World Bank, 2017). Unfortunately, despite promising technologies and market opportunities, energy policies and patterns of finance and investment do not address our continent’s needs adequately. For instance, there is enormous transformative potential in solar off-grid and mini-grid solutions that can deliver clean energy access to our citizens. This also applies to clean energy cooking options ranging, for instance, from improved biomass to liquified petroleum gas (propane or butane).
Yet, to reach the level of implementation needed for universal energy access on our continent, policies and financing needs require major interventions – both in investment resources and domestic capacity. Significantly enhanced policies and financing from the public and the private sectors and new business models can work in tandem with external financing sources to transform the present situation. Political leadership, policy reforms and capacity are needed to lay the foundation for more effective public investment and to facilitate private investments. Better planning and collaboration in-country, within and between regions will also be required to shift available public and private resources into new technologies, new markets and energy pools. AUDA-NEPAD and African policymakers are fully aware of this.
AUDA-NEPAD is cognisant of the reality that access to electricity through national grids will continue to play a major part in energy access solutions. Nonetheless, technological advances in renewable energy, especially solar power, has the potential to dramatically expand options for increasing access for those not served at all or inadequately catered for by national grids, especially in rural communities. Recent advances in solar and wind technologies provide a means to take forward the traditional fossil-fuel-dependent and centralised power system model (World Bank, 2018). The cost-effective development of individual and household solar devices is already providing access to millions on our continent. For instance, decentralised solar options, including mini-grids, are expanding rapidly in East and West Africa – reaching hitherto unconnected and underserved rural and urban populations.
What is worthy of note from the growth in renewable technologies and emerging markets is that an increasing number of new options now exist to improve access and, in many cases, reach people faster and in a more targeted way than grid-expansion would alone. While cost per kWh for these options is often higher than with grid connections, they can avoid long-range transmission costs and provide access at lower cost than diesel generators for local use. They also benefit from individual and modular designs that allow for rapid implementation that is independent of the national grid. There are a lot of other important benefits, which include improved supply reliability and reduced local pollution from diesel usage. There is great awareness in Africa that access to electricity solely through the grid is no longer tenable. Different and varied options have a part to play.
The level of investment required to achieve universal access on our continent, especially in SSA is estimated by the IEA (2018) to be US$ 27 billion per year (2018-30). This amounts to a double of the current level of financing, which highlights the need for major increases from domestic and international sources. Appropriate policy frameworks are needed to respond to the need and financing requirements. This will address issues relating to subsidies on fossil fuels and increased investment in off-grid clean energy. AUDA-NEPAD notes that on the whole, African countries with the greatest share of global population without access do not receive a proportionate share of international Official Development Financing (ODF) for electricity (SEforAll, 2017a). Private financing is nonetheless delivering decentralised, renewable options. Consumer finance business models (e.g. pay-as-you-go and mobile money) and private investment are enabling markets to grow rapidly in some countries and, importantly, to reach communities that we seek to empower. Yet, available financing remains a fraction of what is needed to support countries to achieve the 2030 SDGs. This welfare cost is born largely by women and children through premature death and sickness. This plan will encourage policies and financing for clean cooking to be integrated into poverty alleviation and health strategies at the national and regional levels.
A clean energy revolution on Africa and especially in sub-Saharan Africa is urgently needed to win the fight against grossly inadequate energy access. Clean energy provides a golden thread to deliver on the Aspirations of Agenda 2063, the UN 2030 Sustainable Development Agenda and Goals (SDGs) and the Paris Agreement on climate change. All these can potentially unlock sustainable economic growth, improve human health and wellbeing and enable women and children to lead more productive lives (UN, 2018. Beyond direct economic and social benefits, clean energy access will raise human security and build resilience in states and communities (Rigaud et al., 2018).
Promote Climate Resilience, Environmental Protection and Sustainable Management of Natural Resources
The fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) showed that global climate is warming faster than earlier estimated. It is also increasingly obvious that climate change will continue, at a pace determined by past, present and future emissions of heat-trapping gases. The effects of climate change are widespread and significant, affecting agriculture, energy, health, terrestrial and marine ecosystems, water resources, and some industries across the world and especially in Africa. Countries will have to confront risks from rising sea levels, extreme weather, significantly rising temperatures, intense rains, and floods and storms such as those witnessed in Kenya recently. A number of others will continue to face the risks of more challenging conditions in respect of food and agriculture, fresh water, health, fisheries, infrastructure, transportation and other livelihoods.
In order to counteract the numerous risks associated with climate change, environmental degradation and poor natural resources management, this Plan will reinforce ongoing initiatives at national, regional, continental and global levels to develop and/or strengthen implementation strategies and share experiential knowledge to build capacity for resilience, adaptation and mitigation. At the global level, such initiatives include proposals by the IPCC, the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol, the Nairobi Work Programme, the Bali Action Plan and the Paris Accord, among others. At the regional level, these include initiatives put forward by the African Ministerial Conference on the Environment (AMCEN), the Framework of Southern and Northern Africa Climate Change Programmes, and the East African Community Climate Change Policy. A number of countries have developed frameworks and strategies to address national climate change challenges and built capacity for climate resilience and environmental protection. AUDA-NEPAD will work with African centres of excellence in climate change, environmental protection and natural resources management. These include the African Centre for Meteorological Applications for Development (ACMAD), the World Meteorological Organization (WMO) Regional Climate Centres (RCCs), and those to be set up by AUDA-NEPAD as part of its centres of excellence.
Africa contributes the least to the emission of greenhouse gases globally, but is the most vulnerable to climate variability and change, a situation that is aggravated by the interaction of ‘multiple stresses’, including high dependence on rain-fed agriculture, poverty and weak adaptive capacity. We will therefore continue to work with MS and the regions to design and implement robust approaches that will give direction, coherence, focus and collective effort to build climate resilience and sustainable environmental management capacity. This is with a view to minimising their vulnerability, low carbon growth path dictated by principles of the green economy, sustainable development, and poverty eradication; and to orient governance, knowledge management systems, planning, and national regional structures to treat climate change as a development imperative for Africa.
AUDA-NEPAD recognises the urgent need for MS and regions to design robust approaches that will effectively address disaster risks management on the environment. AU MS and regional bodies have endorsed numerous efforts to support the improvement of climate data, information, and services, including the endorsement of the NEPAD climate strategy. Leading and unifying continental institution, the African Union, continues to play a pivotal role in ensuring that Africa takes a united stand and has a common position in global negotiations and evolving mechanisms. Several efforts have brought considerable coherence to the present AU framework. These include the African Group of Negotiators in the UNFCCC processes, inputs from relevant Specialised Technical Committees (STCs), the work of the CAHOSCC and AMCEN, among others. The framework provides significant guides to climate change migration and adaptation activities, given that about 60% of Arica‘s population derives its food and livelihood mainly from smallholder farming, livestock production and related activities.
One of the challenges within AU Member States and in the five AU regions is the rapid rate of depletion and degradation of environment and natural resources. A number of factors are associated with this, including population growth and low uptake of climate-smart practices. Poor environmental and natural resources management challenges manifest themselves as degradation of forest trees and rangelands, biodiversity loss, land degradation, overfishing, coastal degradation, desertification, extreme weather conditions, water scarcity and illegal hunting, among numerous others. The challenge, therefore, is not only to halt and reverse the adverse trend, but more importantly to develop climate resilience and sustainable environmental and natural resources management practices to reinforce poverty eradication and sustainable economic growth and development. This Plan will strengthen efforts to ensure that environmental and natural resources are used in a way that sustains and improves capacity for the productive use of renewable and non-renewable resources and avoid degradation and over-exploitation.
Advance African economies scientifically and technologically, intensify generation and application of knowledge and innovation
During the period of this Plan, AUDA-NEPAD will support programmes, projects and knowledge-based activities and, very importantly, the establishment of centres of excellence in the generation, collation and sharing of new knowledge. This is to contribute to ongoing efforts to scientifically and technologically advance the economies of African countries, to intensify the use of new knowledge, including traditional knowledge, and to energise innovation across all sectors of African economies. Today, digitalisation is a momentous force in global development with far-reaching changes in the way the world operates. It is impacting different spheres of human existence, from household and personal devices to precision agriculture and complex manufacturing and industrial processes.
Science, Technology and Innovation (STI) is currently witnessing rapid expansion and adoption. It is transforming the way institutions and businesses operate and re-defining the rules of competitive excellence. The adoption of digital technologies, the speed of innovation as well as the range of digital offerings are expected to remain varied across industries, markets and regions. The extent and impact of digital technologies is also expected to vary, favouring institutions, businesses and industries that seek relevance and increasing contribution to domestic and international value chains. While advanced data analytics and digitalisation are witnessing growing adoption across various institutions and industry sectors, there is significant opportunity for adoption in sectors such as manufacturing, agriculture, health, natural resources management, food and beverages, among numerous others that are significant contributors to Africa’s economies. Better use of data, the application of new technologies and the adoption and adaptation of existing innovations will promote transformative development. For the first time in history, African countries are using smart technology to transform their economies at an unprecedented rate.
It is against this backdrop that this Strategic Plan will advance the benefits of digitalisation in the transformation of African economies. Manufacturing, although the most convenient route to economic transformation as well as the adoption of digital technologies and innovation on the continent, remains a marginal contributor to Africa‘s GDP.
Digitalisation is encouraging the development of new business models, which promote speed, flexibility, quality, efficiency and security in operations, to increased business value and performance across the entire production value chain, while shortening access time to markets. It is equally worth noting that disruptive innovation is currently transforming Africa’s economies, creating new markets and unprecedented growth in consumer choices. For instance, in the area of mobile money services, as of 2015, more than 222 million mobile money accounts were registered across Africa, and African countries account for more than half of all mobile money services worldwide. Mobile money services are quietly lifting millions out of poverty and moving women from agriculture into other productive business activities. Numerous African companies are innovating with health, education and agricultural technologies, helping farmers with smart technologies and assisting adolescent girls to access information on sexual and reproductive health. This Plan will build on these developments and capitalise on their potential opportunities. From the demographic dividend of a young and rapidly growing population to an increasingly wealthy middle class, Africa has the potential to become the new global powerhouse of production and consumption of goods and services in the 21st Century, just as Asia was in the late 20th Century.
Innovation drives development processes, underlies economic growth, and is a crucial element in how countries achieve economic prosperity. For our countries and regions to derive maximum benefit from digitalisation, knowledge and innovation, AUDA-NEPAD will facilitate investment in STEM education and training for pipeline development of science, technology and innovation (STI) skills; work with MS and RECs to meet Science, Technology and Innovation Strategy for Africa (STISA) targets on R&D spending; and support research centres to generate as well as promote the adoption and adaptation of existing innovations. The building of STI capacity is particularly important as ability to take advantage of the digital revolution and returns to the use of new knowledge and innovation is dependent on availability of infrastructure to apply innovation. In our interventions, we will be mindful of the need to encourage countries to adopt strategies that seek out and adapt existing innovations to address development challenges rather than investing limited resources in the development of new technologies. We will also be mindful of the need to promote innovation in sectors in which our countries and regions have comparative advantages, especially natural resources. We will promote partnership development frameworks for international investors to assist countries and regions in the development, adoption and adaptation of innovations.
In agriculture, for example, in Sudan, satellite images are currently being used to gather information on crop performance that is shared with farmers by means of their mobile phones. In Nigeria, drone technology is also currently being used to map out areas for potential future rice cultivation. These innovations integrate new technologies with agriculture. With the increasing role of big data, artificial intelligence, machine learning, robotics and quantum computing, a new era represented by the Fourth Industrial Revolution is rapidly unfolding. The application of the principles of quantum physics in computing will have significant implications for operating systems, cyber security, big data, block chains and numerous other applications. Efforts are in the works to develop the next language and/or operating system that will be used by billions in the new digitalised context. This requires a lot of investment in R&D, which involves systematic long-term planning.
AUDA-NEPAD will support and/or establish centres of excellence that will build capacity to enable African scientists, engineers and researchers to work more intensively on artificial intelligence and quantum computing to accelerate the structural transformation of African economies and create the tomorrow that we need for the continent. The implementation of AfCFTA will foster efforts to develop appropriate long-term innovation policy, remove non-tariff barriers that are impeding regional trade and slowing down the creation of regional value chains. This is an area in which AUDA-NEPAD centres of excellence, supported by KMPED, will seek to accomplish results. We believe that our interventions under this objective will open up considerable opportunities, as innovation is the major source of new jobs and provides space for entrepreneurship development in all sectors of any economy.