Breaking the 'Paradox of Plenty' - Turning Africa's Wealth Into Shared Prosperity

A continent rich in natural resources yet burdened by poverty, hunger and crippling debt

The paradox of plenty in Africa is as visible as it is frustrating - a continent endowed with immense natural wealth yet burdened by poverty, hunger, and unsustainable debt.

Every year, $90 billion escapes Africa through illicit financial flows, funds that could transform healthcare and infrastructure. Meanwhile, about 282 million people remain undernourished, and more than half of the nations face debt distress as external debt climbs past $1 trillion.

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At the African Economic Conference held in Gaborone, Botswana, from 23 to 25 November 2024, leaders, economists, and young researchers addressed these challenges head-on.

The discussions centered on practical solutions to turn Africa's wealth into prosperity for its people and were highlighted in UN ECA's podcast The Sustainable Africa Series, which serves as the basis for this feature.

Africa's vast resources, from gold and diamonds to fertile lands and solar energy, have too often enriched a privileged minority - both local and foreign - while leaving the majority of Africans behind. Poverty, inequality, and underdevelopment persist as billions flow out of the region.

"We cannot eat diamonds or bauxite," said Said Adejumobi, Director of Strategic Planning at the Economic Commission for Africa (ECA). "Other regions with fewer resources have transformed their economies by adding value to what they produce. Why not us?"

Debt remains another major obstacle. High interest rates and cycles of unproductive borrowing trap many African nations in dependency. Sonia Essobmadje, Chief of the Innovative Finance and Capital Markets Section at ECA, highlighted the need for better debt management and local capital markets.

"Sometimes we borrow just to repay previous loans, which is unsustainable," said Ms. Essobmadje. She emphasized the need for "economic diversification, fiscal discipline, stronger public debt management strategies, and, above all, the establishment of domestic capital markets."

Zuzana Shwidrowski, UN ECA's Director for Macroeconomics and Governance, stressed that African nations must embrace new growth strategies as they strive for middle-income status.

"Investing in human capital, advancing regional integration, and mobilizing domestic resources are essential," said Ms. Shwidrowski. "With a revenue-to-GDP ratio below its potential, Africa has the chance to increase self-reliance and unlock untapped resources."

Strengthening tax systems and using tools like green and blue bonds could unlock billions for public investment. Regional integration was another key focus.

The African Continental Free Trade Area (AfCFTA) was described as a game changer for reducing reliance on raw material exports and building local industries.

"The AfCFTA is Africa's crown jewel," said ECA's Executive Secretary, Claver Gatete. Integration is critical for building jobs and value chains, but "this cannot be achieved without the seamless movement of goods and people," Mr Gatete. Stressed.

Highlighting the importance of long-term planning, Caroline Kende-Robb, Director of Strategy and Operational Policies at the African Development Bank (AfDB), shared the bank's ten-year strategy, built on four pillars: prosperity, inclusion, resilience, and integration.

"We are optimistic because Africa has unique assets: a young, dynamic workforce, vast renewable energy potential, and urbanization. It's not all about crises--it's about opportunity," she said.

The United Nations Development Programme (UNDP) called for evidence-based policymaking. Raymond Gilpin, UNDP Africa's Chief Economist, noted that ad hoc policies and siloed approaches have hindered the continent. "Policy is not first aid," he said. "It's about building structures for the future."

Young researchers are essential to Africa's transformation. Their ideas and energy are helping address challenges from debt management to sovereign credit ratings.

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"This is my first time presenting to a room full of experts and policymakers," said Kofi Zhou, an emerging economist from China. "It's inspiring to see how our research can make a difference."

For Malick Diallo, a research economist from Senegal, the African Economic Conference is "an invaluable platform for sharing research and networking with peers and experts. It allows us to reflect on how best to help our continent achieve its sustainable development goals."

The paradox of plenty does not have to define Africa's future. President Duma Boko of Botswana urged attendees to move beyond rhetoric:

"Make sure that this conference does not degenerate into merely a generous exchange of flattery," he said. "We must act to lift our people from poverty and raise our continent to take its rightful place as a leader in the world, and not just an emerging frontier."

Africa has the tools to rewrite its story and end the paradox of plenty.

Governance reforms, integration, and youth empowerment must move from ideas to actions.

Read the original article on Africa Renewal.