The recent slump in commodity prices, most notably those of oil and related products, has caused fiscal and current account deficits in Central Africa since 2014. Meanwhile, structural transformation has been slowed down on all of its components. Realizing that a heavy dependence on oil exports is no longer a sustainable development trajectory, representatives of the Central African governments and Regional Economic Commissions (RECs) have reaffirmed at the 33rd Intergovernmental Committee of Experts (ICE) in Douala their commitment to promoting structural transformation through diversification of the economic activities of their countries.
While there is a broad consensus on the need for diversification and industrialization for the sub-region, it is still not entirely clear how this goal can be achieved under the current economic circumstances. Indeed, the limited policy and fiscal space due to the difficult economic climate forces governments to be extremely strategic in their investment decisions. There is, therefore, a clear need for guidance on how to operationalize industrialization in the specific context of Central Africa.
This issues paper aims to delineate the pathways to diversification and industrialization for Central Africa and to assist the United Nations Economic Commission for Africa (UNECA), the RECs and their member states in the sub-region in operationalizing the Douala Consensus, the outcome document of the 33rd ICE. This paper will kick start discussions with experts on industrialization, diversification and development issues in Central Africa from government agencies, international organizations and the community of consultants that have worked on these and related issues.
The issues paper is organized as follows. First, the economic context in Central Africa will be described (2) in order to understand the renewed interest in diversification and industrialization in the sub-region (3). The document then identifies the constraints and drivers of diversification in Central Africa (4) mainly based on the various ECA publications. The final section of the paper presents key elements to effectively pave the way for diversification and industrialization in Central Africa (5).
Experts to deliberate on pathways to economic diversification in Central Africa
Yaounde, 23 January 2018