No matter how well Botswana, Mauritius and other sparsely populated countries perform economically, African economic growth rates will continue to lag behind the rest of the world until the more populous countries like the Democratic Republic of Congo, Nigeria, Sudan and Ethiopia start pulling their weight, says Benno Ndulu, author of a new report by the World Bank titled Facing the Challenges of African Growth: Opportunities, Constraints and Strategic Directions.
Ndulu said Africa has fallen behind the rest of the world because of corruption, the failure of public enterprises, low productivity, youthful and dependent populations, opaque and unaccountable governments and dilapidated or non-existent infrastructure. The Tanzanian-born World Bank economist said that the huge investment that was made into infrastructure was allowed to go to waste because it was not well utilised or was not maintained.
Bad governance has played a “huge” role in Africa’s predicament: “It started from having a government that catered to a small elite … instead of the rest of the citizens.” He added: “Accountability systems were very weak, and where they existed, accountability was to the donors [rather than to the citizens].” The opportunities brought by democracy should be lauded as these have shifted the balance back to the citizens, he said.
Ndulu said the continent could be on the road to sustainable growth if African countries improve their investment climates. “Significant amounts of [African] wealth is sitting outside the continent,” he said, estimating the figure to be around US$600-billion. Most of this money is legitimate, he adds, but stays abroad because of fears of nationalisation and expropriation.
Ndulu recommends that Africa should innovate further, focusing on upgrading its technology infrastructure, investing in higher education and manufacturing IT-related equipment.
He said African countries must also look at respecting property rights. “Contractual disputes should be settled in commercial courts,” he said, adding that government and the private sector should work together to build infrastructure that will make it possible for the private sector to thrive.
The public sector should play the role of catalyst, lowering the cost of doing business, and promoting the adoption of new technologies. “This is quite contrary to the position advocated by some, that the market alone should actually create opportunities,” he argued.