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Africa's Uneven Growth

Calls for Greater Help

By Father John Flynn

WASHINGTON, D.C., NOV. 28, 2006 (Zenit) - Africa's economic situation is improving, but much remains to be done. This is the nutshell conclusion to be drawn from a number of recent reports on sub-Saharan Africa.

Infrastructure, investment, innovation and institutional capacity are the "Four Big 'I's" needed in Africa, the World Bank declared in a Nov. 9 press release. The needs came out in a World Bank study, "Facing the Challenges of African Growth: Opportunities, Constraints, and Strategic Directions."

"Africa is on the move and is perched on the cusp of breaking out of the long economic stagnation of the 1970s and 1980s," said Gobind Nankani, the World Bank's vice president for the Africa Region, when presenting the study.

The report shows that some African economies have demonstrated the capacity to achieve short spurts of economic growth. The challenge now is one of sustaining this effort for longer periods and ensuring that the poor, women, youth and other marginalized groups benefit from that growth, Nankani added.

Extreme poverty in Africa (spending less than a dollar a day on basic necessities of life) rose from 36% of the population in 1970 to around 50% of the population (300 million people) in 2000, explained John Page, the World Bank's chief economist for the Africa Region. Thus, Africa has 10% of the global population but accounts for 30% of the world's poor.

Africa has fallen behind East Asian countries in economic development. Per capita incomes for Africa and East Asia were virtually the same in 1960. By the end of the 20th century, sub-Saharan Africa's per capita income was less than one-fourth of East Asia.

The need for greater enterprise and entrepreneurs was highlighted in another World Bank press release, on Nov. 13. Before the year 2050, the number of Africans between the ages of 15 and 24 will pass the 400 million mark. The challenge is to find enough jobs for them and their families.

Too often the private sector has been left out of finding solutions to problems such as this, the World Bank observed. But now, Africa is making it easier to do business, with dozens of countries cutting the time, cost and red tape involved in establishing a firm and complying with legal and regulatory requirements.

Another positive sign noted by the World Bank is a rise in investment from overseas. In 2005, according to the U.N. Conference on Trade and Development, inward foreign direct investment rose 78%, to $31 billion, in Africa.

Development indicators

An overview of the continent was provided Oct. 30, with the publication by the World Bank of the "African Development Indicators 2006." The study noted that a number of African countries, including Senegal, Mozambique, Burkina Faso, Cameroon, Uganda, Ghana and Cape Verde, have lifted significant percentages of their citizens above the poverty line.

Growth for all sub-Saharan Africa averaged 2.4% in the 1990s. It then rose to 4% in 2000-04 and was estimated at 4.3% in 2005. In addition, inflation on the continent is down to historic lows and fiscal deficits are dropping.

Progress is being made in education as well. Primary enrollment rates have risen significantly across the continent. Moreover, HIV/AIDS prevalence and child mortality rates have started to fall.

The general figures conceal wide differences between countries. The report shows that 16 African nations have sustained annual gross domestic product growth rates in excess of 4.5% since the mid-1990s.

In fact, the fastest growing group of African countries has had an average growth rate of 5.5%. These countries account for 35% of the region's people. But the 13 slowest growing economies, by contrast, have seen an average growth of only 1.3%. Many of these are either engaged in conflict, or have recently emerged from conflict. They host 20% of the region's people.

One of the most notable laggards is Zimbabwe. The country recorded a negative growth rate of 2.4% in 2004. Moreover, Africa is home to six of the 10 countries judged as having the most difficult environment for starting a business. Infrastructure continues to be a problem, with inadequate roads, inefficient ports, and power outages.

For their part, developed countries have also pledged to increase aid to Africa by $25 billion a year by 2010. If fulfilled, this would more than double the assistance to the region. In recent international meetings the richer nations have undertaken to open their markets to African products, and to forgive the debts of 25 of the continent's poorest countries.

These pledges may remain more apparent than real, the report commented. The World Bank cited opinions by the Organization for Economic Cooperation and Development, and the Strategic ...

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