The World Band has advised African leaders to invest in human capital to be able to keep up with the obvious consequences of fast expanding global digital economy.
The World Bank particularly fears that African economic risk job losses if they do not align with the trend as advanced technologies like 3D printers, robots, and artificial intelligence grow and is poised to take over massive jobs.
“We are extremely concerned that many African countries are not prepared to compete in what is becoming a digitalised economy,” World Bank Group President, Jim Kim, said on Thursday in Washington DC at a press conference which officially opened the 2018 IMF/World Bank Spring Meetings.
“Everyone, I think, understands the need for physical capital, for physical infrastructure and investments in infrastructure. But I think there’s still an underappreciation of the importance of improving health and educational systems.
“We are also seeing lots of evidences that suggest that many of the low skill jobs will be taken over by technology.
“We hope that technology will help many African countries grow and find new ways of driving economic growth, ” he said.
Kim advised Nigeria and other African countries to invest more in education, which he said was the only way to take advantage of the growing economic digitalisation.
“Without adequate education, Africans would learn less and earn less in the future. We have good data on that.
“What we’ve been able to learn is that if you look at what we call learning adjusted years of schooling, in other words, not just how many years you’ve been in school, but how much you’re learned in those years of school, and we have so much better data now on how much children are actually learning
“When stunting rate is over 30 per cent and sometimes close to 50 per cent, that group of young children will not be prepared to compete in a digital economy in the future.
‘So human capital is a huge issue,” he said.
The World Bank sees relationship between health outcomes and educational outcomes only becoming stronger over time as economies become more digitalized.
“And I so I think it’s time for all countries to really take a hard look at how well they’ve invested in their own people because that is likely going to be the most important determinant of whether they’ll be able to keep up with economic growth,” Kim told journalists attending the meetings.
He said that the concerns being raised around learning is not just for children but also skills programs for adults. “The human capital agenda, I think, has been neglected for far too long,” he stressed.
Meanwhile, the World Bank says the global economy is showing solid momentum and expects global growth to edge up to 3.1 percent in 2018, its strongest performance since 2011, as the recovering investment, manufacturing, and trade continues, and as commodity exporting developing economies benefit from firming commodity prices.
Sub-Saharan Africa’s growth is projected to peak at about 3.1 percent this year and to average 3.6 percent in 2019-20.
The forecast is premised on expectations that oil and metal prices will remain stable, and that governments in the region will implement reforms to address macroeconomic imbalances and boost investment.
Kim, however, says the challenge now is how to ensure that strong growth will translate into inclusive growth so that the benefits of global economic integration are enjoyed by all members of society.
“This period of robust growth is a great opportunity to invest in human and physical capital, filling infrastructure gaps, improving education and health outcomes, and increasing female labor force participation, could continue to drive growth. If policy makers around the world focus on these key initiatives they can increase their country’s productivity, boost workforce participation, and move closer to the goals of ending extreme poverty and increasing shared prosperity.”
Kim also re-echoed the IMF concerns on mounting debt, as he harped on the need for countries to ensure accumulated borrowings result in favourable outcomes for the people.
“…the number of low income countries whose debt to GDP ratios we are worried about now went from 7 last year to 14 this year. And a major part of it is that there is so much Non-Paris Club debt going into these countries. And so we’re concerned about it, we’re watching it very, very closely,” Kim stated.
Meanwhile at another press conference, IMF Managing Director, Christine Lagarde said Global debt at 164 trillion dollars and 225 per cent of global GDP remains a downside risk.
She said that the rising debt levels presented risk to low income countries.
“And in low-income countries, if recent trends continue, many, not all, will face unsustainable debt burdens.”
Onyinye Nwachukwu, Washington DC