WEF: Africa still trailing world in growth
The World Economic Forum (WEF) began a meeting on Africa on Wednesday with warnings that the continent faces being left further behind as its growth rates fail to match those elsewhere in the world.
Africa is forecast to grow 6,2% in 2007, having achieved 4,9% over five years from 2001 and 5,5% last year alone, said a joint report by the World Economic Forum (WEF), World Bank and African Development Bank.
“The African macro-economic environment is looking better and better,” WEF senior economist Jennifer Blanke told reporters in Cape Town.
But she added: “Although there have been improvements, the problem is that the rest of the world is moving faster.”
International Monetary Fund statistics put Chinese growth at 10% last year, India at 8,4% and Russia at 6,4%.
The latest Africa competitiveness report, released on the first day of the 17th WEF meeting on Africa, expressed doubt that the continent’s growth trajectory would be sustainable.
Much of the growth is being fuelled by variable external factors such as high commodity prices, debt relief and a favourable international economic environment.
High growth rates would have to be sustained over decades for Africa to raise the living standards of its people, the joint report argued.
“Present growth rates in Africa, although high by historical standards, are still short of the estimated 7% annual growth that would be required to meet the Millennium Development Goal of halving poverty rates in the region by 2015,” it said.
The report measures the competitiveness of 29 African states among a sample of 128 countries from around the world.
“The competitiveness of most countries in Africa continues to lag behind the rest of the world and even behind other developing regions,” it said.
North Africa needed to work on technological advancement and market efficiency, while most countries south of the Sahara needed to start with the basics such as upgrading infrastructure and improving health systems
“Several of the big economies ... are neglecting more basic requirements that would help them migrate into a higher stage of development,” the joint report stated.
World Bank chief economist John Page said the stereotype of Africa as a non-competitive continent was “simply not true”.
“It remains a challenge to realise the promise of the world-class enterprises we found in every [African] country and in practically every industry,” he told a media conference.
To this end, the continent needs good policies and institutions and must invest heavily in physical infrastructure and human resources.
About 700 business and political leaders from the continent and the rest of the world were gathering in Cape Town for the annual WEF Africa meeting to seek ways of boosting growth on the world’s poorest continent.
Africa’s growing economic ties with non-traditional partners such as China and India is one of the issues to come under the microscope.
Li Ruogu, president of China’s Export-Import Bank, said trade between his country and Africa was growing at about 30% per annum, reaching $55-millio last year.
“But if we want to really generate trade, we have to generate development,” he told a news conference. “Without development, there is no basis for trade.”
Tokyo Sexwale, a South African presidential hopeful and chairperson of Mvelaphanda Holdings, said Africa welcomed China and India’s economic boom.
“The secret will be how Africa leverages on the huge demands [for natural resources] and capital injection that come from the two countries,” he said.—AFP.