Africa achieves 5pc growth rate

From Victoria Ruzvidzo in Cape Town South Africa
Africa has achieved average growth rates of 5 percent in the last decade, as the continent becomes the fastest growing region in the world, with prospects of higher performance, the World Economic Forum on Africa meeting being held here heard yesterday.

Largely associated with poverty, disease and wars, Africa was fast transforming into a dominant force that could soon dictate the pace for the rest of the world.

The United Nations Conference on Trade and Development (UNCTAD) yesterday conceded that the continent was on the rise, attributing the growth to better macroeconomic management, high domestic demand and a relatively stable political environment.

External factors aiding growth include favourable commodity prices, stronger economic co-operation with emerging economies and an increase in foreign direct investment.

The World Bank forecasts that rising agricultural production, public investment in infrastructure, growth in retail, telecommunications, transportation and financial services fuelled further growth, forecast at 5,2 percent this year.

In the opening plenary yesterday, South African President Jacob Zuma and Ghanaian Deputy President Amissah Arthur said Africa had now put in place measures to deal with vices such as corruption and political coups that characterised the continent previously.

“You can no longer talk about the old Africa. We need to develop urgently partnerships that are different from the past, relationships that benefit Africa more,” said Mr Arthur.

“If Africa is one of the fastest growing regions and has a billion people, then we need to think differently about how we are to interact with the world. We also need to consider how we interact with ourselves to develop a common approach to the problems of the continent,” he said.

President Zuma said Africa had come up with a peer review mechanism under the auspices of the African Union, by which countries were held accountable.

“This system allows your peers to review you. We are changing Africa into a very democratic region. For example in South Africa we have a very strong anti-corruption culture that we have developed. Government has established lots of institutions that are fighting corruption,” he said.

Mr Arthur said transformation was taking place in most countries on the continent and this needed to be buttressed by inclusive growth.

This was supported by the Governor of the Bank of Botswana, Ms Linda Mohohlo, who felt much more could be achieved by accommodating previously marginalised sectors.

“Inclusive growth is inclusive of women, youth,civil society and the physically challenged.”

Beneficiation of resources, interconnectivity of Africa in terms of road and rail networks and operating as one unit, would foster growth and create a more prosperous continent by 2040, said president Zuma.

It was, however, noted that the growth experienced by Africa over the last decade should also translate into tangible improvements in the standard of living.

Statistics reflected growth yet there remained a mismatch with the situation on the ground as the populace still grappled with poverty, high unemployment and disease. The feeling was shared by most presenters yesterday who said more needed to be done to bring congruency to the growth.

In its paper, UNCTAD noted that the continent had enjoyed the “wrong” type of growth.

“Despite Africa’s recent growth performance, there are indications that countries on the continent are experiencing the wrong type of growth in the sense that joblessness is still widespread and has not led to significant reductions in poverty,” it said.

One reason for this was the fact that the growth had not involved a shift from low to high productivity activities both within and across sectors.

Such a transformation would be reflected in that economies would begin with a high share of agriculture in GDP and, as incomes rose, the share would decline and manufacturing would take over and eventually the services sector.

“This transition has taken place without any significant manufacturing development which is critical in creating employment.

“It is therefore not surprising that Africa has experienced jobless growth over the past decade.”

The World Economic Forum on Africa meet ends today.