Thematic Focus of the 4th STC on Finance Monetary Affairs, Economic Planning and Integration
The Expert and Ministerial sessions and discussions aim to drive the realization of various Agenda 2063 flagship projects and programmes such as the African Financial Institutions (African Central Bank, African Monetary Fund, African Investment Bank and Pan African Stock Exchange) and the African Continental Free Trade Area (AfCFTA). It will also be a platform to brief Member States on AUC programme updates and progress related and propose policy recommendations for approval by the Assembly of Heads of State and Government of the Union.
The 2020 STC on Finance, Monetary Affairs, Economic Planning and Integration will tackle the topic of the 4th Industrial Revolution and Africa’s readiness to take part of this revolution. Africa has skipped three industrialization cycles and must ensure that it is part of the upcoming fourth industrial revolution. In order for Africa to become part of the Fourth Industrial Revolution, the continent must diversify, modernize technology, and produce the right goods effective for the AfCFTA to be successful.
Here is an overview of the four thematic areas:
Work skills for the future: Looking at this from the African perspective, alongside the rapid growth of the youth population in Africa, is the fact that it is increasingly becoming better educated. It is estimated that by 2030, the number of youths aged between 20-24 years with secondary education will peak to about 59%, compared to the current figure of 46% (Youth Policy report, 2018). Additionally, statistics indicates that in Africa, while only about 3.1 million jobs are created each year, 10 to 12 million young people are in search of employment, leaving a significant amount of youth unemployed (AfDB, 2018). Skills-mismatch is also another reason for youth unemployment, as young people lack the skills required for them to be employed.
As a result, organizations and higher education institutions need to adopt new approaches to learning, due to the evolution of future skills becoming more interdisciplinary, with critical soft skills being the essential factor. Some researchers further suggest that in future, up to 47% of jobs may be automated while others are suggesting a figure of only 9% (Saadia Zahidi, 2018). Thus, considering that human capital and skills are complementary to other factors of the production process, the government needs to prepare the youth for a future work integration, based on skills of the future.
Government and Regulatory framework for the 4th Industrial Revolution: Establishing appropriate regulatory framework in respect to 4IR is essential as it sets the tone, define parameters as well as establish the rules governing every sector, economy or industry, towards achieving technological development and advanced manufacturing. These regulatory and governance frameworks can either facilitate the digital era to grow rapidly, or slow down the successful adaptation of emerging technologies in production.
Therefore, considering that there is a direct correlation between regulatory framework and responsiveness to change in business environment and the productions process, both the private and public sectors can take advantage to lay the rules for the entire industry. Hence, in order to allow for an easy transition from one revolution into another, government leaders and institutions must lead the process to provide the right digital infrastructure, and policy reforms needed to change the business climate.
Future of Productivity: Harnessing 4IR to Achieve Agenda 2063: The arrival of the 4IR is expected to create up to 3.7 trillion in value to manufacturing firms across the globe, after a prolonged period of the manufacturing sector experiencing productivity stagnation. The digitalization of manufacturing will lead to a wide range of changes to the manufacturing processes, outcomes and business models, leading to significant benefits for users. As a result, production processes can be decentralized in real time, doing away with centralization (Fraunhofer, 2014).
Furthermore, technology holds incredible potential to transform sectors rapidly, to increase the productivity of systems while lowering emissions and waste. This allows sectors, the opportunity to monitor and manage the Earth’s surface and resources at a speed and scale, hitherto could not have dreamt of. Additionally, technology enables sectors to collect and harness vast amounts of data, and make breakthrough advances in areas like healthcare, agriculture, energy, education and mobility.
Financial technology (FinTech), Digital Currency and Financial Inclusion: The past decade has seen the emergence of digital platforms across Africa. Mobile financial services (MFS) has become a very popular trend across the African continent with the emergence of mobile phones to access financial services and execute financial transactions such as M-Banking, M-payments and M-money. In addition, the emergence and development of electronic financial solutions has been improving the online payment systems in countries, where consumers do not necessarily have debit/credit cards or bank accounts.
However, better access to all segments of the African population including rural users, farmers and women and youth, is required to make an impact on the continent’s socio-economic growth and development. Financial Technology (Fintech) companies are providing digital solutions to financial services sector, with block-chains allowing digital transactions between two parties without verification of a third party, and facilitating transfer of crypto-currencies such as bitcoins. The greater use of social media platforms to promote products across regions, has been improving and promoting the use of online payment systems. All these Digital financial Services solutions help facilitate cross border transactions.