Davos: Economic inclusivity high on agenda
High on the agenda at Davos is the need to look at economic inclusivity and who benefits from a county's growth. While firmly a global issue, it pertains more especially to emerging and developing economies (including South Africa and the rest of Africa).
Inclusivity is of particular importance as it undoubtedly advances a country's political and economic stability. To realise this, an essential component is economic growth.
Estimated to reach a population size of two billion by 2050, Africa is currently well placed to achieve accelerating growth, already currently attaining GDP growth rates of between 4% to 6%. In contrast, Ashburton Investments expects South African GDP to grow at approximately 2.8% over 2014.
Much is needed to ensure sustainable long-term growth rates and economic inclusivity. The solution is multi-dimensional and governments alone cannot guarantee these considerations.
Some part depends on the domestic private sector and its ability to invest in the economy, as well as the broader framework of foreign direct investment across the continent.
Stability and investor-friendly policies will no doubt play an essential role in implementing these strategies.
Throughout Africa, there remains a great need for further infrastructure investment in supporting higher levels of growth. Such advancements would be far-reaching, including across sectors such as road and rail infrastructure, as well as energy generation.
Ultimately, a strong infrastructural backbone is needed to support growth. Part of the solution might possibly lie in policies that encourage beneficiation of the continent's natural resources.
African countries would need to realise the importance of participating on a global competitiveness scale, including creating labour and industrial efficiencies.
To a certain extent, inclusivity relies on small and medium business success and the ability for entrepreneurs to flourish.
Inclusivity means engagement into the economy.
While stability, infrastructure and industrialisation are all key components, the one pillar on which they all stand is education.
This remains an essential pre-requisite for individuals to effectively participate in the economy.
Firm commitments and focus around education need to be prioritised throughout the entire continent if all individuals are to participate in the anticipated economic expansion.
Paolo Senatore is chief investment officer (South African single manager funds) at Ashburton Investments.