While Africa can sustain five percent growth, a number of risks loom large, says the World Economic Forum in its Africa@Risk report.

The four key risks facing Africa are food and freshwater security, geopolitical instability, economic shocks and climate change.

The report stresses that urgent collective action is required, including raising agricultural productivity, strengthening local adaptation to climate change, improving governance and enhancing economic resilience through diversification.

"Decision-makers cannot assume that tomorrow's growth story will read like today's. The economic fundamentals are in place, but political dynamics and the scope of structural reforms are more likely to shape the next chapter," said the WEF.

The report concludes that while Africa has huge opportunities and ever-increasing regional and global interdependence, the imperative is for collective action to mitigate the shared risks.

The report notes that a sense of democratic accountability backed by disciplined budget planning would allow governments to use increased revenues and the benefits of lower debt service obligations to alleviate poverty and reduce income gaps.

The researchers also note that economic diversification is a priority in order to reduce commodity dependency and vulnerability to external shocks.

"Identifying potentially competitive sectors and industries able to create employment is key to maintaining sustainable growth," said the WEF. It recommended deeper economic partnerships with emerging economies to expand trade, as this offered the possibility of trade diversification.

A dynamic private sector committed to investment is needed to develop a sustainable economy, but the huge regulatory burden in sub-Saharan Africa was highlighted as a stumbling block.

"High political risk"

"Sub-Saharan Africa has the most onerous regulatory burden in the world," said the WEF. The researchers also noted that Africa is seen as a region of "high political risk", with significant risk premia being demanded by equity investors, lenders and insurers.

Inadequate infrastructure in many African countries was seen as imposing barriers to trade and investment and causing supply-side bottlenecks.

"Developing physical infrastructure capacity requires disciplined resource management," said the WEF.

Head of economic and financial risks at the WEF, Irene Casanova, told a conference in Johannesburg that investing in human resources was very important in order to reduce the skills crisis on the Continent.

Associate Director Adeyemi Babington-Ashaye added that the forum was doing a lot to engage the youth, and young people would be invited to "join the action" in Cape Town.

In preparing this report, more than 20 experts from business, academia, non-governmental organisations and civil society were asked to consider the drivers of the recent period of unprecedented growth in Africa and the opportunities that exist, as well as the threats to Africa''s continuing progress.

More than 800 participants from 50 countries participated in the 18th World Economic Forum on Africa in Cape Town from 4-6 June, including Thabo Mbeki, Jacob Zuma, Trevor Manuel and Tito Mboweni but excluding Robert Mugabe.

Under the theme Capitalising on Opportunity, the meeting addressed the challenges that Africa must address if it is to be seen as a reliable and competitive partner in the global economy.

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