Economic Growth in Africa
In a contrast to some of the more decidedly negative events I report on, it is my pleasure to convey news of the recently released World Bank report on Africa’s economic development. Africa, as a region, is growing economically on pace with the rest of the developing world. According to the report, the continent expanded economically at a rate of 5.4 percent in 2005 and 2006.
“Africa is now moving in tandem with the rest of the world,” John Page, the bank’s chief economist for Africa, said.
Over all, the region’s economy grew by 5.4 percent in 2005 and 2006, faster than the economies of many developed countries and similar to those of developing nations other than India and China. Nations that export oil or minerals led the pack, but 18 others — home to more than a third of the region’s population — also performed well, the report said.
Africa still occupies the bottom rung of the world’s economic ladder. Forty-one percent of sub-Saharan Africans live on less than $1 a day — an improvement from 47 percent in 1990, but still the world’s worst poverty rate. A lack of skills, low productivity, red tape and poor infrastructure hobble business development.
The recent economic progress merely made up for ground lost during the plunge that accompanied independence and the painful belt-tightening that followed. Over all, Africa has simply recovered its position of three decades ago, the report says. “The reason: when things go well they do not last, and when they go wrong, they go very wrong,” the report states.Still, Mr. Page said, Africa is at a turning point. He credits the improvement, in part, to the fiscal discipline advocated by the World Bank and the International Monetary Fund in the late 1980s and early 1990s.
Though there is still a long way to go, the report attributes this improvement to smarter economic policies, improved governance and a reduction in armed conflicts.