African Economic Outlook 2020: Developing Africa’s workforce for the future

Africa’s economic growth has stabilized at 3.4 percent in 2019 and is expected to pick up to 3.9 percent in 2020 and 4.1 percent in 2021 but to remain below historical highs.

Growth’s fundamentals are also improving, with a gradual shift from private consumption toward investment and exports. For the first time in a decade, investment accounted for more than half the continent’s growth, with private consumption accounting for less than one third.

The 2020 Outlook highlights, however, that growth has been less than inclusive. Only about a third of African countries achieved inclusive growth, reducing both poverty and inequality.

The special theme this year is delivering education and skills for Africa’s workforce of the future. Despite progress in recent decades, Africa still lags behind other developing regions in education and skill development. Policy actions should include measures to improve both the quantity and the quality of education and align education policy with labor market needs.

This requires expanding access to schools in remote areas, increasing incentives to invest in education, developing a demand-driven education system that caters to employers’ needs, investing in nutrition to help poorer children, and building STEM and ICT capacity.

To address inequality in education, the Outlook appeals for progressive universalism in education spending—setting high priorities for the poor and disadvantaged and for basic education, where social returns are highest.

The Outlook shows that public expenditures on education and infrastructure are highly complementary, as investing in both has a much greater payoff than investing exclusively in just one. The efficiency of education spending is much lower in Africa than in developing and emerging Asia.

The good news, though, is that by enhancing the efficiency of education spending—now at 58 percent for primary schooling—African countries could almost reach universal primary enrollment, without increasing spending at all.

Key policies to improve spending efficiency and education quality include conducting education expenditure audits and reviews, improving teacher quality, and using performance based financing.

In its last part, the report provides short-to-medium term forecasts on the evolution of key macroeconomic indicators for all 54 regional member countries, as well as analysis on the state of socio-economic challenges and progress made in each country. This adds granularity to the more aggregated analysis conducted in the first part of the report.