NEWS - Africa on brink of solid growth

Africa on the brink of solid growth

Thu, 09 Nov 2006
 

Africa was on the cusp of breaking out of a long period of economic stagnation, the World Bank said on Thursday.

"Renewed growth and improved governance across a number of African states is setting the stage for taking advantage of opportunities that are emerging from a rapidly changing world economy," the bank's vice president for Africa, Gobind Nankani, said.

He was announcing a bank study 'Facing the challenges of African Growth' that highlights infrastructure, investment, innovation and institutional capacity as critical areas for sustainable development.

"African economies have shown that they are capable of short spurts of robust growth. The challenge, as the study confirms, remains one of sustaining such a pace for longer periods," Nankani said.

Lags in eradicating poverty
"Africa's slow and erratic growth performance has been identified as the single most important reason behind its lagging position in eradicating poverty." Africa hosted only 10 percent of global population, yet was home to 30 percent of the world's poor. In 2000, 300 million people in Africa lived on less than one dollar a day.

The study finds that a distinct characteristic of Africa's long-term growth experience was a deep and prolonged contraction of growth from 1974-1994 sandwiched between the moderately high growth rates of the 1960s and after the mid-1990s.

"Annual per capita growth rates of around two percent in the early 1960s rose to nearly five percent by the end of that decade, then fell steadily through the early 1970s, turned negative during the mid-1980s, and since the mid-1980s have then climbed back to around two percent since the mid-1990s," the author of the study and advisor to Nankani, Benno Ndulu, said.

Behind the world
"With the exception of Botswana and Mauritius, growth in the rest of Sub-Saharan Africa has been episodic in the four decades since 1960 resulting in the region falling further behind the rest of the developing world and in income levels regressing relative to the levels in 1960."

In 2004, per capita income for a group of nine African countries had actually regressed relative to the levels in 1960. These were Angola, Central African Republic, Comoros, Madagascar, Niger, Senegal, Sierra Leone, Democratic Republic of Congo and Zambia.

Capital flight from Africa had made a dire situation worse. In 1990, it was estimated that Africans held up to 40 percent of their wealth outside Africa.

Sapa