Structural and Emerging Challenges

Despite the impressive growth records there remains challenges that serve as obstacles to the pace of economic transformation. Some of the key thematic areas in which challenges are clearly manifested are presented as follows

Inadequate Specialisation and Diversification in the Production Structure

The impressive record does not imply the absence of some of the old, new and emerging challenges. Africa continues to be portrayed as a homogeneously monolithic entity without differential and comparative advantage and development deficits. This simplistic, homogenous categorization is a symptom and reflection of inadequate specialisation and diversification in the production structure, which then leads to high degrees of homogeneity in occupational structures, social organisations, and lifestyles. Inadequate specialisation and diversification of the economies of the continent reproduces brain drain and underutilization of the human resource potential.
 
Climate change and Climate change Impact

Climate change has also become a major obstacle to affecting the capacity and speed of economic development and transformation. Evidence of climate change include increases in average temperatures, unpredictable rainfall patterns, increased concentration of green house gasses, frequent floods and droughts and changes in land use measured by increased rate of deforestation, soil erosion and reduced period of desirable fallow. The impact of climate change is generally increasing, is already felt at the local level and is often impacting particularly on the already poorest and most vulnerable areas and groups of people. Improving the productive capacity of the people on the continent requires intensive advocacy for adaptation measures as well as increased flow financial and technical resources for climate change adaptation. Climate change issues are wide in scope and inter-relate many sectors of a national economy including the economic development, trade and investment, social equity and democratic governance.  Therefore, Africa needs to position itself in the negotiation process so that agreements reached from the on-going negotiations on emission reduction also take into account the developmental peculiarities of the continent as a whole.

International Trade and Investment

International trade regime, presents both an opportunity and a challenge for the short to long-term development prospects of Africa. The outcome of particular trade and investment agreements can slow down or accelerate the pace of economic growth and transformation. Governments and trade negotiators need the consciousness, awareness and technical competencies to negotiate trade and investment deals that protect domestic markets, local enterprises development, and legitimate use of tariffs as a tool for both revenue generation and regulating development.