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Sub-Saharan Africa’s Difficult Road to Recovery

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By ABEBE AEMRO SELASSIE, Director, African Department, IMF

The COVID-19 pandemic represents an unprecedented health and economic crisis for sub-Saharan Africa. Within months, the spread of the virus has jeopardized years of development and decades-long gains against poverty in the region while threatening the lives and livelihoods of millions of people.

In our latest Regional Economic Outlook, we project -3 percent growth in sub-Saharan Africa’s GDP in 2020, representing the worst outcome on record for the region. The drop will be even larger for economies dependent on tourism and commodity exports. Growth in the region should rebound modestly in 2021 to 3.1 percent, but for many countries, a return to 2019 levels won’t occur until 2022-24.

Countries in the region acted swiftly to protect their people from the worst of the crisis, but lockdown measures came with high economic and social costs. Policymakers in sub-Saharan Africa now face the added challenge of rekindling their economies with fewer resources and more difficult choices.

As the region looks toward the future, uncertainty over the path of the pandemic continues to loom over an enduring recovery.

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Confronting policy constraints and hard choices

The top policy priority should be saving lives and protecting livelihoods through health spending and income and liquidity support for households and businesses. Even with limited funds, policymakers acted swiftly with what they had.

However, countries in the region entered the crisis with significantly less fiscal space than they had prior to the global financial crisis of 2008-09. COVID-19 related fiscal support in sub-Saharan Africa has averaged 3 percent of GDP—markedly less than what has been spent in other regions of the world.

Advanced economies have had the space to do “whatever it takes.” In sub-Saharan Africa no such luxury exists, as countries struggle to do “whatever is possible” with their scarce resources.

Limited resources will ultimately force difficult choices.

Fiscal policies needed to boost the economy will have to be balanced against debt sustainability—already a daunting challenge for many countries in the region. The need to support growth through monetary policy will need to be matched against maintaining external stability and longer-term credibility. Financial regulation and supervision measures are needed to address crisis-affected banks and firms but should not compromise longer-term growth.

All the while, efforts to stabilize and grow economies must be weighed against the need to maintain social stability while preparing for sustained and inclusive growth over the long term.

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Calling on the global community for support

Without significant additional financial assistance, many sub-Saharan African countries will struggle to simply maintain macroeconomic stability while meeting the basic needs of their populations.

The IMF has taken swift action to cover a significant portion of the region’s needs by providing about $16 billion financing this year alone to 33 countries and immediate debt service relief to 22 of the poorest, most vulnerable sub-Saharan African countries. We are working with countries to put in place governance mechanisms to help ensure that the funds benefit their people as intended.

We have also worked with the G20 to suspend debt service payments to official bilateral creditors and welcome the extension of the Debt Service Suspension Initiative.

But more help is needed. Sub-Saharan Africa faces additional financing needs of $890 billion through 2023. Private financial flows are expected to fill less than half of that need, while current commitments from international financial institutions and bilateral donors will cover only one-quarter of the need. Under that scenario, the region still faces a projected financing gap of $290 billion through 2023.

 No country should have to choose between paying their debt or providing food and medicine for their people. To prevent the loss of decades-worth of development gains, the region will need access to more grants, concessional credit, and debt relief.

Looking toward a brighter future

Despite an uncertain outlook, the potential of sub-Saharan Africa and the resourcefulness of its people remain clear. Now is the time for lasting transformational reforms.

Sub-Saharan Africa will find its way back to a path of green, sustainable and inclusive development. The pandemic has presented a historic opportunity to build a better future and the international community has an important role to play.

Fostering better transparency and governance to improve trust in rule of law, strengthen business conditions and encourage external support will be a key element for developing a better future. Transformative domestic reforms to improve revenue mobilization, digitalization, trade integration, competition, social safety nets, and climate-change mitigation will be critical for the region’s resilience, growth and job creation.

Nelson Mandela once said, “may your choices reflect your hopes, not your fears.” The long climb out of this crisis won’t come easy, but the actions and choices of today will be vital for a prosperous and resilient future for sub-Saharan Africa.


Culled from IMF Blog

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Africa’s Tech Skills Development Goes Beyond the Classroom-SAP

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Tech skills development in Africa is increasingly going beyond the borders of the classroom as organisations take novel approaches to addressing pervasive skills availability constraints.

Kholiwe Makhohliso, Managing Director at SAP Southern Africa,  says upskilling and mobilising Africa’s considerable skills base is a defining opportunity for the future success of the continent. “Digital technologies continue to shape industries and businesses throughout the continent, driving high levels of demand for professionals with relevant skills. As the pace of technological change continues to accelerate, organisations increasingly need new approaches to skills development to keep in step with the latest advances in cloud, AI and other transformative technologies.”

SAP’s 2023 report ‘Africa’s Tech Skills Scarcity Revealed’ laid bare significant challenges with skills availability among organisations in South Africa, Kenya and Nigeria. The report revealed that low levels of tech skills availability affect most organisations, with four in five companies reporting negative consequences from a lack of tech skills.

While the tech skills gap persists globally – with McKinsey finding that 87% of global senior executives reported their companies were not adequately prepared to address the skills gap – the situation can be more acute for African organisations.

Cloud, AI skills in high demand

According to Manos Raptopoulos, President: SAP EMEA, skills availability has become even more important in light of the ongoing impact of cloud and artificial intelligence on the region. “Enterprises throughout the region are leveraging powerful new cloud and AI capabilities to transform their business models and accelerate growth and innovation. As the business landscape becomes increasingly shaped by the power of these technologies, organisations need access to relevant skills to ensure they reap the benefits of the cloud and AI revolution.”

SAP launched new learning opportunities for developers in 2023, focusing on cloud and generative AI capabilities. SAP Build Code solutions offer AI-powered productivity tools for developers and draws on the power of SAP’s AI co-pilot Joule to boost productivity and embed code generation capabilities for a range of applications, from data model and application logic to test script creation.

The company also launched new role-based certification and free learning resources for back-end developers in 2023 as part of a global commitment to upskill two million professionals by 2025.

Work-ready skills for graduates

The SAP Young Professionals Program (YPP), offered by the Digital Skills Centre of SAP, extends the company’s skills development efforts to graduates. YPP is aimed at enabling young talent to utilise the latest SAP technology and innovation, and covers software functional and technical knowledge and certification, with a strong focus on the latest technologies and a range of soft skills to ease entry into the workplace.

Since its launch in 2012, the SAP Young Professionals Program has trained and graduates more than 4100 candidates across 41 countries, including over 1900 in Africa alone.

Vincent Mabeka, a 2023 graduate from South Africa, says the SAP Young Professionals Program helped him improve his skills, learn about new technologies and gain hands-on experience and unlock new job opportunities.

“The Young Professionals Program required dedication, hard work and passion, but rewarded me with guidance, feedback and recognition for my skills and capabilities. This has helped me secure a job as an SAP Solutions Advisor where I apply the knowledge and skills I learned to exciting projects. Thanks to the resources and network I developed during my time on the program, I continue to learn and expand my skills and abilities.”

Youth skills development in focus

With the world’s fastest-growing youth population, any digital skills efforts in Africa must extend to the continent’s young people. Africa’s working-age population is predicted to grow to more than 600 million by 2030, constituting a quarter of the world’s under-25s. But digital skills remain elusive among Africa’s youth, despite a projected 70% of jobs expected to require digital skills by the end of the decade.

Enter SAP Africa Code Week (ACW), a coding skills development programme aimed at youth that is held annually in partnership with UNESCO, the Association for the Development of Education in Africa, and Irish Aid.

Since its inception in 2015, ACW has successfully empowered 17 million young people across 54 countries with coding and computational thinking skills, while close partnerships with NGOs and governments across the continent has helped drive the inclusion of coding in national curricula.

Toward the end of 2023, SAP also announced a new pilot project in partnership with UNICEF and other public-private organisations aimed at preparing underserved youth for the digital workforce. The SAP Educate to Employ initiative targets youth aged 16 to 24 and provides soft skills foundational knowledge using the Student Zone portal on SAP’s learning site. The knowledge prepares youth for a possible career in technology, with potential roles in development, consulting and support.

Makhohliso says the support of a broad range of partners is essential to overcoming youth skills challenges on the continent. “By directly addressing youth unemployment and inspiring our vibrant youth to pursue careers in the exciting world of technology, we together with our partners hope to mobilise the potential of our continent to become leading players in the future digital economy.”

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Schneider Electric Targets 900m Africans With Sustainable Energy Solutions

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Schneider Electric said it is targeting 900 million Africans including 95 million Nigerians with universal access to sustainable energy solutions in rural communities by fostering a greener and more resilient future.

The global energy provider said it is committed to providing access to clean electricity to 50 million by 2025, and 100 million by 2030. To date, 46.5 million people have already benefited from Schneider’s energy access solutions.

The country president, Schneider Electric West Africa, Ajibola Akindele, speaking at the Energy Access Investment Forum (EAIF) conference, held in Lagos, recently, said they have a wide range of Access to Energy solutions suitable for electrifying small homes and micro-enterprises, fundamental public services, up to villages and communities.

“Our mission is to be a global digital partner for sustainability and efficiency, empowering all to make the most of our energy resources, bridge progress and sustainability for all. At Schneider Electric, we call this Life is On,” he said.

Director MEAS, Access to Energy, Schneider Electric, Thomas Bonicel, speaking on Schneider Electric’s Access to Energy (A2E) program, emphasized the program’s mission to empower communities through clean and reliable energy access including training & entrepreneurship programs, social & inclusive business, and investment funds.

“There are over 700 million people across the world without access to energy, 600 million in Africa and 95 million in Nigeria; at Schneider Electric, we have decided to deploy our Access to Energy solutions in Nigeria.

“Our major KPI is the impact measured by the quantity of connected people and with Villaya Flex, our latest innovation, we are ready to support independent electricity access and renewable energy adoption in remote villages and off-grid communities,” he said.

The commercial leader, Microgrid, Schneider Electric, Teina Teibowei, said, Villaya Flex, a packaged, comprehensive microgrid solution, is specifically designed for rural, off-the-grid communities and aims to ensure a dependable and sustainable energy supply to meet daily needs and power productive economic activities in these

Teibowei also noted the Nigerian government and the World Bank’s joint efforts to extend electricity access to rural Nigerian villages, adding that  Schneider Electric’s Villaya Flex microgrid solution is well-positioned to tackle the electrification challenges of these remote communities, potentially serving as a valuable asset for the World Bank’s Nigeria Distributed Access through Renewable Energy Scale-up (DARES) project.

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Create AI Strategies In Line With Your Business Strategies – Deloitte West Africa Tells Firms

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Data Science and Analytics Leader at Deloitte West Africa, Jania Okwechime, has advised firms to leverage Artificial Intelligence (AI) responsibly and sustainably by creating AI strategies in with their business plans. According to her, businesses also need to put governance and risk processes in place so that they can innovate with trust and confidence.

Jania Okwechime disclosed this at an interview with the media at the sidelines of the just-ended 8th Ghana CEO Summit held in Accra. She mentioned that in this era, AI is transforming businesses more than anything else in the world and therefore called on institutions across West Africa to embrace AI.

Jania also advised businesses to take advantage of AI to improve and accelerate their products and services for the benefit of their customers. Although she acknowledges the growing adoption of AI in West Africa, she stated that the adoption of AI globally has moved from the Programmable Logic Controllers (PLCs) stage to more implementation stage.

“In the African continent, we are still experimenting with some of the opportunities that the AI can generate for the people. So, we see adoption, but it could get accelerated”.

“I think it is not going to be long before they would see the impact of AI. You already saw some of the presenters [8th Ghana CEO Summit] today specifically in the telecoms and advertising industry that, AI is already being leveraged by businesses. We are only going to see the acceleration in the next coming years”.

Why AI has become a buzzword

She noted that although Artificial Intelligence has been around for decades, AI has now become a buzzword.

According to her though Artificial Intelligence has been around for decades, businesses have now realised its importance and are now taking advantage of it because of the data explosion.

“Every time an action is created, data is formed. Every time we send a text message, every time we pick up the phone to make a phone call, every time we pick our favorite series on Netflix, it’s creating data. So, there’s a huge data explosion”, she mentioned.

“Ninety percent of the data that we used today were created in the past two years. So, you can imagine. Now we have no choice but to harness technology like AI to be able to gain insights”, she added.

Generative AI and the traditional AI

Touching on Generative AI and traditional AI, Jania reiterates the differences between the former and the latter.

In her words: “The difference is that Generative AI can perform tasks predominantly done by humans. Like reading documents, creating documents, generating videos, generating reports, etc.”

“Now, it is making AI more accessible to businesses in a way that they can harness in three different ways. They can change the way they interact with their customers and increase customer experience internally within their network and their internal organisations. So, that they can improve internal statistics”, she pointed out.

Continuing, she said by harnessing AI and generative AI, businesses can reduce cost by automating tasks, and can make things more effective and efficient.

“One thing that is key to also mention is why AI and generative AI are used today for automation tasks and improving the set of processes that businesses already have. Businesses that are going to be successful and thriving in the next five years are those which are harnessing AI to transform what they are doing. And this needs some more thinking”, she stated.

Concerns about AI leading to job losses

On concerns of AI leading to job losses and other things, she said: “So, that is the concern right? because I mentioned that there are certain things that AI and generative AI can do today that were predominately done by humans. So, that is a concern, and we understand why. However, it doesn’t need to be”.

We don’t need to worry

“We don’t need to worry about our staff and our talent losing jobs, but rather we must transform the talent.  So, things are going to change in businesses. Their staff are going to change the way they work. So, organisations are responsible for upscaling their staff”.

She added that “Because their roles are going to be transformed. Instead of one person being in charge of creating a report, now that person needs to know how to use and leverage AI solutions to be able to interpret that report to be able to make strategic decisions. So, AI has a big implication on talent and the responsibility and the responsibility of the organisations to invest in the talent and upscale it”.

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