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African Economic Outlook 2019

The state of the continent is good. Africa’s general economic performance continues to improve, with gross domestic product growth reaching an estimated 3.5 percent in 2018, about the same as in 2017 and up 1.4 percentage points from the 2.1 percent in 2016. Looking forward, African economic growth is projected to accelerate to 4 percent in 2019 and 4.1 percent in 2020. While higher than that of other emerging and developing countries, it remains insufficient to address the structural challenges of persistent current and fiscal deficits and debt vulnerability. The challenge is thus twofold: to raise the current growth path and to increase the efficiency of growth in generating employment. The 2019 African Economic Outlook highlights that macroeconomic stabilization and employment outcomes are better when industry leads growth, suggesting that industrialization is a robust path to rapid job creation. However, African economies have deindustrialized. Although structural change is occurring, it has been through the rise of the services sector, which has been largely dominated by informality, low productivity, and an inability to create quality jobs. To avoid the informality trap and chronic unemployment, Africa needs to industrialize and add value to its abundant agricultural.