Climate change is the major force shaping the future of work in sub-Saharan Africa, says managing director of the International Monetary Fund (IMF), Christine Lagarde.
Lagarde made the statement in her opening remarks at an IMF conference on the future of work in sub-Saharan Africa, co-hosted by the Ghanaian government in Accra today.
Demographics, technology and climate change were the three major forces shaping the future of the region, she said, with climate change being “the major force”.
“IMF research shows that climate change is expected to hit low-income countries the hardest: a 1-degree Celsius rise in temperature could cause low-income countries to experience a 1.5 percent fall in GDP on average,” Largarde said.
The region’s population was expected to increase from about 1 billion to 1.7 billion by 2040, she said, and the labour force would increase at double the rate of the last decade.
“As a result, sub-Saharan Africa needs to create 20 million jobs per year to keep up with its growing labour force.”
Making policy decisions in the face of such highly uncertain trends was challenging, she said, but the IMF had developed three scenarios for the region that could happen “depending on how policymakers tackle the forces of demographics, technology and climate change”.
The scenarios offered an opportunity to explore how policy choices influenced the future.
In the first scenario, Africa Adrift, automation would lead to reshoring of manufacturing to advanced economies, which meant that the traditional manufacturing export-led growth model would not be viable. Large investments in infrastructure that promoted manufacturing exports would be wasted.
The second scenario was Africa for Africa, wherein trade tensions increased and inward-looking policies became more commonplace. These changes would be fuelled by technology radically displacing workers and increasing income inequality.
The final scenario was Africa Arisen. “This is a world in which technology increases productivity for all and global economic cooperation leads to decisive action to mitigate the adverse effects of climate change.”
In this scenario, Lagarde said, sub-Saharan Africa would successfully harnesses new technologies and create an emerging vibrant middle class.
Highlighting education and digital connectivity policy, Lagarde said that in the Africa Arisen scenario, the region could succeed in harnessing the benefits from new technologies, but “to get there we will need a well-trained labour force with the right skills”.
“Despite successes in primary education, sub-Saharan Africa lags behind in secondary education. The share of children in the region who attend secondary school is just 30 percent, the lowest in the world.
“And simply increasing enrolment is unlikely to be enough. We need to promote digital literacy and identify the skills that will allow the next generation to work with and take advantage of technology rather than be replaced by it.”
A second area to focus on was digital infrastructure, she said.
“Africa has made progress bypassing landlines and leapfrogging directly to mobile phones. At the same time, only 20 percent of the population has internet access, less than half the world average. Broadband services often remain prohibitively expensive.”
IMF research had shown, she said, that there was a potential to raise three to five percent of GDP in domestic revenues by improving the efficiency of the tax system and through institutional reforms.
– African News Agency (ANA)