The World Bank has highlighted infrastructure investment, improving the investment climate, harnessing skills for innovation and building institutional capacity as critical areas demanding action in sub-Saharan Africa.
The World Bank says success on these four fronts will help the region and Africa as a whole make up for missing two decades of global growth and to replicate the growth models that have lifted millions of people out of poverty.
“Africa is on the move and is perched on the cusp of breaking out of the long economic stagnation of the 1970s and 1980s,” says Gobind Nankani, the bank’s vice-president for the Africa region.
The bank holds in its just-released report on Africa that the continent is capable of regaining the pace of robust growth it experienced between 1960 and 1973, but to do this it must create the right conditions to benefit from opportunities offered by the growing global economy and by information-based technology.
Key to this is the need to lower indirect costs that seriously constrain export-led growth, to invest in skills and to support innovation to spur productivity and competitiveness, the bank says.
The World Bank highlights that a distinct characteristic of Africa’s long-term growth experience is its historical U-shape, featuring a deep and prolonged contraction of growth from 1974-1994, a period sandwiched between the moderately high growth rates of the 1960s and after the mid-1990s.
“Per capita growth rates of around 2% in the early 1960s rose to nearly 5% by the end of that decade, then fell steadily through the early 1970s, turned negative during the mid-1980s, and then climbed back to around 2% since the mid-1990s,” said Benno Ndulu, adviser to the World Bank’s vice-president for the region.
In the report, authored by Ndulu, the importance of good governance and bureaucratic efficiency, of innovation or technological progress in raising productivity and competitiveness and the need to address infrastructure shortcomings, notably in transportation and energy, are underlined.
The two dimensions of policy action emphasised in the report are the avoidance of policy distortions and the need to address under-provision of public goods to support the growth process. – I-Net Bridge