Sharp commodity price falls and the terrorist attacks in the United States held back Africa’s economies in 2001, according a report released by the African Development Bank (AfDB) for its annual meeting which kicked off on Tuesday.
Bank President Omar Kabbaj opened the meeting with an optimistic picture of Africa’s future.
”The factors responsible for modest growth in 2001 are, in large part, due to the global economic slowdown, which was exacerbated by the September 11 attacks in the United States,” according to the AfDB’s African Development Report.
The Bank estimated real growth in Africa in 2001 at 3,4%, 0,2% higher than the previous year, and forecast 3,5% growth for 2002.
Kabbaj pointed out however that average per capita income grew slightly more than one percent in 2001.
The AfDB report explained that ”since most African countries are heavily reliant on primary commodity exports, they incurred severe terms of trade losses with adverse impacts on their balance of payments, exchange rates, output and employment.”
Coffee producers such as Kenya, Ethiopia and Uganda, were among the worst hit in this regard.
The bank pointed out that a slump in tourism was particularly felt by African states where this sector is key: Egypt, Morocco, Tunisia, Kenya, Uganda and Tanzania.
It also stressed the effects of domestic policies and governance.
”Economic fundamentals continued to strengthen in 2001 reflecting the strong commitment of many African governments to prudent fiscal, monetary and exchange rate policies.”
”Remarkably,” it added, ”in the face of deteriorating external accounts… money supply slowed, inflation subsided (from 13,7 to 12,2%) and fiscal balances improved.”
At the end of the day, however, Africa’s growth in 2001 ”fell well short of what is needed to make a material impact on poverty… and attain international development goals by 2015,” the AfDB said.
But according to Kabbaj, things are looking up.
”We are meeting at a time when development prospects for our countries are improving,” he said at the opening session of 37th annual meeting of the bank’s board of governors.
”The global economy is on the verge of emerging out of last year’s recession,” he said, citing the latest International Monetary Fund prediction of a ”healthy growth of four percent in world output in 2003.”
Kabbaj told the governors and delegates that African economies
had received a boost from external initiatives such as the European
Union’s pledge to remove barriers on ”everything but arms” and the
US Africa Growth and Opportunities Act (AGOA).
AGOA, which opens up US markets to African textile products, ”is beginning to have a positive impact on investments and exports,” he said.
Kabbaj also pointed to pledges by the United States and the European Union to ”significantly increase their development assistance” to developing countries.
”These positive undertakings are evidence of the renewed international commitment to assist African countries and their people lift themselves out of endemic poverty,” he said.
But he warned that Africa was the only developing region that risks not meeting so-called Millennium Development Goals, or the Monterrey Consensus, agreed by industrial and developing countries.
Those most likely to fare better, said Kabbaj, are the 30 or so countries ”that have put in place sound economic and governance reforms.”
”The prospects for the remaining countries — especially for those in conflict (of which there are about a dozen) ? are however, not promising…” he added.
Potential for accelerated growth, he explained, derives from two initiatives: poverty reduction strategies and the New Partnership for Africa’s Development. – Sapa