Pan-African Coalition for Transformation (PACT)

A single mechanism for economic transformation

The Coalition is a way for governments and local policymakers to gain information and support as they design and implement policies that support economic transformation strategies. Its rationale is simple but powerful: African governments can accomplish more together than they can apart.

That’s why countries need a regular platform to harness initiatives, knowledge, policies, and reforms and turn individual success into collective progress. Africa has many development initiatives in place, but so far it’s lacked a single mechanism to connect all of the stakeholders required to drive economic transformation. PACT will create these connections at all levels through the single lens of economic transformation.

Forming the Coalition

The Pan-African Coalition for Transformation was launched in March 2016 at the inaugural African Transformation Forum, which drew 270 participants representing almost three dozen countries. The main takeaway: African countries pursuing transformation policies can accomplish more ― and accomplish it faster ― by working together.

Key attributes

The Coalition forms a network of like-minded countries, organizations, and sponsors to share valuable knowledge and harness successful initiatives, polices, and reforms to speed up the implementation of transformation strategies.

Coalition Chapters

PACT will consist of eight Chapters, each organized around a separate area of economic transformation and comprise core members with relevant expertise, interest, and knowledge. Chapters will function as small, nimble networks of like-minded countries, organizations, and sponsors to coordinate joint action – sometimes in person, sometimes remotely – to share valuable knowledge, and promote successful transformation strategies for all of Africa.

Members will include countries that have previously worked with ACET on transformation programs, as well as countries that are committed to future policy reforms and eager to engage with peers and stakeholders. Countries known for their advanced drive in Chapter areas — as well as their potential to bring about catalytic action — will champion the work of each Chapter and help coordinate policy efforts.

Chapters will meet at least once a year, guided by a set of broad objectives with specific work programs and targets for each member country.

Agriculture

Modernize agricultural practices. Improve value chains. Raise productivity.

Why Agriculture?

Agriculture is the bedrock of Africa’s economic transformation. The continent has nearly 60% of the world’s arable, uncultivated land and well over half of those employed in Africa work in agriculture. But across the continent, farmer productivity is low, value chains are weak and fragmented, and dependence on food imports is on the rise. Modernizing Africa's agriculture will not only improve food security, but offer countries their most immediate pathway to overall economic transformation. What will a modern agriculture sector look like? And what are the most immediate challenges to address – and opportunities to seize?

Champion Country: Kenya

Extractives

Promote local content. Promote value addition strategies. Increase the worth of extractive resources.

Why Extractives?

Resource-rich economies in the past two decades have sought to actively promote local content and value addition strategies as the means to leverage the contribution of valuable natural resources to economic growth and development. But at the core of this strategy is the requirement for investors to expand employment opportunities, invest in local supply chains, open equity to local partners, use local financial institutions, and generally stimulate the broad-based growth of non-resource sectors. Local content and value addition could provide a winning formula for accelerated economic transformation, but are African countries getting it right?

Champion Country: South Africa

Resource Mobilization & Management

Enhance domestic resource mobilization. Improve fiscal resource and aid management. Secure reliable and transparent development financing.

Why Resource Mobilization & Management?

The landscape for international development financing is changing rapidly. Traditional ODA is decreasing as new players such as China, India, and Brazil are rising. In addition, philanthropies, foundations, and private organizations are emerging in their own right as vehicles for development assistance. Increasingly, African countries are looking to these new actors as well as to new instruments and new modalities, all the while recognizing the importance of mobilizing their own domestic resources. However, some of the new opportunities for financing may bypass government systems and bring complex risks in meeting development priorities. How can countries best manage this shifting financial landscape?

Champion Country: Rwanda

Regional Integration & Trade

Strengthen regional integration. Improve trade facilitation. Boost regional markets. Remove bottlenecks. Strengthen global export competitiveness.

Why Regional Integration & Trade?

Many African regions have begun to formulate successful approaches to improving trade. One-stop border posts between Zambia and Zimbabwe and at a crossing between Kenya and Uganda have reduced time and costs involved in moving goods across borders. But outside a few such examples, it remains a challenge to translate the good intentions expressed in Africa’s regional trade agreements into concrete actions. Trade facilitation can stimulate economic transformation by raising exports, supporting diversification, increasing productivity, and enabling participation in value chains. So how do we harmonize facilitation instruments and remove bottlenecks to increase trade flows in Africa?

Champion Country: Rwanda

Financial Inclusion

Increase access for SMEs. Increase access for smallholders. Increase access for women. Enable entrepreneurs to grow businesses.

Why Financial Inclusion?

Small and medium-sized enterprises account for 95% of businesses in Africa and supply the majority of new jobs in the non-agricultural sectors. Meanwhile, in the agriculture sector, smallholders make up more than 80% of farmers. But accessing credit remains a major constraint to growth for SME entrepreneurs, while African banks generally are hesitant to approve agricultural loans. SMEs and smallholders alike face systemic credit market biases that inhibit access to affordable finance. What can be done to reduce or eliminate these biases – and in turn accelerate economic transformation?

Champion Country: Nigeria

Light Manufacturing

Accelerate industrialization. Seize investment opportunities. Expand industries. Boost production. Create jobs.

Why Light Manufacturing?

Industrialization, particularly the expansion and increased sophistication of manufacturing production and exports – as well as its related job creation – remains an essential part of Africa’s economic transformation. Unfortunately, manufacturing as a share of GDP has declined over the past few decades in most African countries, although in absolute terms it is growing. With new developments that favor Africa’s ability to breaking into world manufacturing markets – such as rising wages abroad and improving economic policy environments at home – how do countries raise their focus and commitment to manufacturing, and develop a coherent strategy to promote it?

Champion Country: Ethiopia

Youth Employment & Skills

Improve basic education. Improve skills training. Create long-term employment opportunities for rising youth population. Meet future labor demands.

Why Youth Employment & Skills?

The working age population in Africa continues to increase at a rate faster than any region in the world. The implications of this trend for the labor market are enormous – promising, if skills match the available jobs; alarming if not. It’s true that the level of education of young people in Africa is low. But in many instances even the highly educated lack the skills required by employers or the skills that will ensure productive jobs. How can we improve the quality of Africa’s basic education, and also address the skills mismatch that threatens to undermine Africa’s looming labor boom?

Champion Country: Côte d'Ivoire

Power & Electricity

Close Africa’s power gap. Encourage innovation. Increase public-private collaboration.

Why Power & Electricity?

More than half of Africa’s population lacks access to basic electricity and clean cooking facilities, and the numbers are rising with population growth and urbanization. For most of sub-Saharan Africa, electricity generation is limited and often relies on a single source, which in most cases is non-renewable. Tackling Africa’s energy problems is a central part of economic transformation, but creating an effective, accessible and sustainable energy environment in Africa requires significant investments. That’s why public-private partnerships are essential in closing Africa’s power gap, but to what extent? What ought to be the role of government in shaping the future of Africa’s power sector?

Champion Country: Tanzania

A proven model is the starting point

PACT’s eight Chapters will organize around an economic sector or thematic area in which policy action is required. Each will have a broad objective that supports transformation strategies, with specific work programs and targets established at the country level.

But how do the member countries interact to further their goals? By following a unique system that’s been proven to work – the ACET Policy Engagement Model (APEM):

1. Conduct multi-country case studies in a key policy area, such as identifying the causes of low agricultural productivity

2. Engage local experts or think tanks to ensure unique country circumstances are incorporated into research, analysis, and solutions

3. Validate work by bringing together policymakers, the private sector, and other stakeholders to discuss – and refine – findings and recommendations

4. Identify overarching issues pertinent to all participants in the multi-country study to encourage individual countries to collaborate on mutually beneficial solutions

By applying this model to PACT, Chapters will have a framework in place, and structure operations around a proven process for gathering research, sharing ideas, and supporting policy implementation. Specifically, they will:

• Identify common problems and challenges being faced in a particular issue area by all members of a Chapter

• Identify examples of best practice in one or more countries to be shared with other country members of the same Chapter

Launching Chapters

Given the urgency of Africa’s transformation needs, PACT needs to move quickly and boldly. But we also want to set realistic goals, achieve consistent results, and use resources efficiently. For that reason, PACT Chapters are grouped into two categories for formation and launch.

Phase I

Targeted launch: Early 2017

Agriculture

Extractives

Resource Mobilization & Management

Regional Integration & Trade

Phase II

Targeted launch: Early 2018

Financial Inclusion

Light Manufacturing

Youth Employment & Skills

Power & Electricity

Phase I Chapters will meet in early 2017 to:

• Begin peer learning and sharing of best practices

• Agree on overall objectives and goals

• Draw up country-specific action plans and targets

• Convene private sector partner representatives and other stakeholders

• Align development partner goals as they relate to a Chapter’s focus across countries

Phase I Chapters will present progress reports at the June 2017 African Transformation Forum in Kigali, Rwanda.

Phase II Chapters will begin similar preparations for launch in the second half of 2017.

Collaborating with experts

Working closely with Africa’s leading development institutions is a core tenet of PACT operations. Both the African Development Bank (AfDB) and the Economic Commission for Africa (ECA) have placed economic transformation at the center of their long-term strategies. As such, they will be necessary, vital, and valuable partners for the Coalition.

The AfDB crafted a set of critical priority programs, the “High 5s”, that naturally align with PACT chapters: light up and power Africa, feed Africa, industrialize Africa, integrate Africa, and improve the quality of life for the people of Africa. Likewise, the ECA, which was a key partner at the African Transformation Forum, boasts deep research and analysis in a number of areas, such as regional integration and extractives, that will help guide Coalition Chapters.

We accomplish more together than apart

PACT is built upon the shared awareness that no insitution or individual has all the resources or answers. To ensure this innovative approach succeeds in speeding up transformation progress, stakeholder groups within and outside Africa must come together in collaboration. It’s critical that PACT incorporates existing research, leverages all available expertise, and harnesses the growing interest in transformation strategies from across the full range of Africa’s diverse development spectrum.

For stakeholders in the process of Africa’s economic transformation, the case for joining PACT is clear.

For government agencies

Participation in PACT will provide access to highly qualified experts on policy themes; opportunities for peer-to-peer learning from countries with relevant experience; channels for engagement with industry and civil society; and access to exclusive funding opportunities that can support the implementation of the transformation agenda.

For industry and civil society

Participation in PACT will provide opportunities to build meaningful relationships with public officials at the national and intergovernmental levels; collaborate with other public and private institutions with similar interests and objectives and learn effective ways to leverage corporate social responsibility efforts, development projects and advocacy campaigns towards economic transformation.

For development partners and foundations

PACT will provide opportunities to direct resources towards high-impact interventions through a transparent, African-led process based on local needs. Donors will have the opportunity to maximize their impact through harmonization with other donors. They will have access to new and actionable ideas as they emerge, providing unique opportunities to support Africa’s transformation.

ACET currently works with a network of African think tanks and researchers across the continent―from Botswana, Burkina Faso, Cameroon, Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Rwanda, Senegal, South Africa, Tanzania, Uganda, and Zambia. In addition, we work with other experts from around the globe. Some of the institutions with which we’ve collaborated included the World Bank, JICA, NORAD, USAID, DfID, the governments of Ghana, Guinea, Liberia, Norway, Sierra Leone and the Netherlands, along with the Hewlett, Ford, Rockefeller, and Bill and Melinda Gates Foundations. ACET has already helped shift Africa’s development paradigm from growth to transformation.

As African countries now look to the post-2015 development agenda and beyond, the Pan-African Coalition for Transformation is poised to be a leading catalyst at the forefront of lasting change on the continent.

What happened at Ghana ATF2018?

Hosted by ACET in collaboration with the Government of Ghana, the second African Transformation Forum (ATF2018), was a unique, policy-focused event that brought together leading experts and practitioners to share perspectives on how to accelerate job growth, boost investment, and implement transformation policies.