Foreign direct investments inflows into Africa in 2017 is expected to reach over $57 billion, supported mainly greenfield investments from emerging economies, according to the newly published African Economic Outlook (AEO) 2017.

The report, a joint work of the African Development Bank (AfDB), the Organisation for Economic Co-operation and Development (OECD) and the United Nations Development Programme (UNDP), under the special theme ‘Entrepreneurship and Industrialisation’ was launched today May 22, 2o17 at the AfDB Annual Meetings in Ahmedabad, India.

The report notes that the composition of total financial flows to Africa reflects the dynamism of the continent’s domestic markets.

“In 2017, inflows are projected at almost $180 billion. Remittances will reach $66.2 billion, up from $ 64.6 billion in 2016. Foreign direct investment inflows are expected to reach over $ 57 billion in 2017, supported mainly by greenfield investments from emerging economies,” it said.

According to the report, tax revenue remains the most important source of domestic financing in African countries but has slowed with the decline in commodity prices, stating that African countries will need to explore other options of mobilising domestic resources to minimise vulnerability of revenues to volatility in commodity prices.

The report suggests that unlocking Africa’s less volatile sources of growth to spur human development will require greater investment in human capital – such as in health, education and skills – , stronger capacities to diversify financing and more effective efforts to promote structural transformation, adding that despite a decade of progress, 54 per cent of the population in 46 African countries are still living in poverty.

“It is essential to double efforts to empower Africans with the necessary skills to promote development from the bottom up, driven by domestic innovation and investment. This is why the African Economic Outlook focuses this year on the role of entrepreneurs in Africa’s industrialization,” it says.

Speaking at the launch, Mr. Abebe Shimeles, Acting Macroeconomics Policy, Forecasting and Research of the AfDB urged African countries to shift away from consumption to investments and export to grow their economies.

He argued further that the suggestion that commodities impact on economic growth is not true as some non-commodity dependent economies in Africa grew in 2016.

Mr. Abebe urged African countries to improve the business environment, and invest in structural transformation, as that would lead to growth.

In his remarks, Dr. Mario Pezzini, the Director of the OECD Development Centre in Paris pointed out that Africa’s industrialisation will not only depend on manufacturing, but also technology, adding that technology is changing the picture.

Dr. Abdalla Hamdok, the Acting Executive Director of the Economic Commission for Africa (ECA) in his comments noted that Africa has the competitive advantage to promote industrialization through agro-processing, and urged the countries of the continent to turn towards that direction.

Dr. Akinwumi Adesina, the President of the AfDB called on Africa to pay attention to developing its youth. “Let’s pay attention to skills development of Africa’s youth. Africa can become the workforce source of the world,” he said, noting the growing youth population of Africa. Africa is the only continent with a significantly growing youth population. Projections suggest that in less than three generations, 41 per cent of the world’s youth will be African. By 2050, Africa’s youth will constitute over a quarter of the world’s labour force

The report indicated that Africa’s industrialisation will differ from the experience of other world regions.

“First, the 54 African countries are diverse and will thus follow various pathways to industrialisation. Second, industrialisation will not rely solely on the manufacturing sector, which remains modest at 11 per cent of the continent’s GDP,” it said.

The report pointed out among others that the entrepreneurial culture in Africa is vibrant with about 80 per cent of Africans viewing entrepreneurship as a good career opportunity.

“The continent has the highest share in the world of adults starting or running new businesses, but often in sectors where productivity remains low. New industrialisation strategies should focus on leveraging this dynamism and targeting the continent’s fast-growing private enterprises which have potential to create quality jobs,” it added.