The report shows a steady improvement for quality of life on the continent, but experts say countries need to pay more attention to the potential of entrepreneurs in order to reap the economic benefits.
The African Economic Outlook 2017 provides a snapshot of the continent over the next two years, examining the ways in which it could improve in the fields of macroeconomics, trade policies, human development and governance.
A key focus of this year's outlook is the need to unlock the potential of African entrepreneurs as a means of accelerating Africa's industrial transformation.
DW spoke with Arthur Minsat from the Organization for Economic Cooperation and Development's (OECD) Africa Desk about the report.
DW: What does this report tell us about the African continent?
It tells us that Africa has huge entrepreneurial potential, but that this potential remains untouched. To better tap the entrepreneurial potential of Africa it is important to relay the targeted policies to promote opportunity-driven entrepreneurs to industrial policies. This is why the topic is important to industrialization and entrepreneurship in Africa.
In what ways have the lives of Africans improved?
Many African countries have seen tremendous progress in the areas of health, education, infrastructure, roads, electricity, housing and security. But at the same time we have big challenges ahead. We still have at least 500 million people trapped in poverty in about 45 African countries. We also have an issue with cementing the rule of law. So while the framework has improved, the measures have not always been implemented so there is a gap in some areas. So while a lot of progress has been achieved in previous years, a lot more needs to be done - especially because a lot of young Africans are now entering the labor market. Africa is the youngest continent on Earth and therefore it is important to create more jobs to allow citizens to have a better life.
There is still a serious challenge in the fight against poverty in Africa, despite the continent's move toward better income, education and health. Why is this the case?
The issue is that the growth patterns in Africa have not been considered enough. What we see is that a lot of the growth has been dependent on natural resources. It is also due to a fall in commodity prices. But this type of growth is not sustainable and people are pushed into certain fields of work which they may not want. And this is why the potential for entrepreneurship in Africa remains largely untapped, because people are pushed into it not because they want it but because they have no other choice with such limited jobs available on the job market.
How has the African Development Bank (AfDB) worked with African governments to improve the situation?
The AfDB has done a lot of things to improve the situation alongside African governments. They draw on the Country Policy and Institutional Assessment (CPIA) program to look at the overall picture of the continent. It is also leading a number of important projects which aim to industrialize and integrate Africa and generally improve people's well-being. These are the main areas in which the AfDB is working with the African governments, but they also provide them with advice on macroeconomic policy and on how to make better investments for the development of their countries
How can African governments design and implement effective industrialization strategies?
In order to implement these strategies, governments need to first decide what the competitive advantages of their countries are and make this industry a priority. For example a country with an advantage in farming can push for the development and growth of agri-businesses in the farming sector. Other countries may have a competitive advantage in manufacturing. This will allow them to also attract investors from abroad. Implementing these policies requires good coordination between different levels of government. The national level of government can do a lot of things, but local level governments can also make a big difference by giving more opportunities to local businesses and entrepreneurs. It is also important to monitor and evaluate these policies to ensure that the priorities which have been identified are actually met and the goals are achieved. Governments need to evaluate both successes and failures so they are able to adjust the policies accordingly. To do this it is also necessary to identify three big issues which can help African small enterprises. One is to work on the basic skills of employees and entrepreneurs. The second is to learn how to attract both foreign and local businesses who work together in order to connect to the outside market and offer African services to the rest of the world. The third issue is to figure out how to finance the growth of the company - the financing gap for African companies is larger than any other region in the world. It is therefore important to provide solutions to these small companies so they can sell their innovative ideas and skills to other markets.
Arthur Minsat is an economist and head of the Africa Desk at the OECD Development Center. He co-authored the report.
Interview: Eunice Wanjiru