Economic reforms that helped drive Africa’s fastest growth for decades appear to be stalling in the face of the global crisis, a report from international institutions showed on Wednesday.
The World Bank, African Development Bank and World Economic Forum said African states must keep opening up their financial systems and resist protectionist forces to become more competitive.
The Africa Competitiveness Report 2009 gave sub-Saharan African countries an average competitiveness rating of 3,5 and North African countries of 4 — indicating little change from the year before. China has a rating of 4,7.
”The ranking is overall more or less the same. There hasn’t been a perceptible weakening or strengthening,” said Jennifer Blanke of the World Economic Forum.
”We’re really concerned that in the face of the economic crisis and given the challenges to capitalism and open markets that we’re seeing, that there is a back-pedalling on some the important reforms that we’ve seen.”
Economic growth across Africa averaged well over 5% a year between 2001 and 2008, the International Monetary Fund says, but is expected to be below 3% this year, increasing public pressure for measures to ease the pain.
”Protectionist forces are emerging in response to the global economic crisis, yet such measures will further reduce demand and restrict growth. Africa’s leaders must resist domestic political pressures to erect trade barriers,” the report said.
Earlier reform efforts had enabled to Africa to weather the global financial crisis better than feared, according to the World Bank.
”They’ve been able to withstand this crisis somewhat better than would have been expected because of those reforms and some of the important changes they had made in running their economies,” the bank’s managing director, Ngozi Okonjo-Iweala, told a World Economic Forum (WEF) meeting in South Africa.
Others at the WEF meeting, which runs until Friday, struck a positive tone for Africa’s outlook, saying the potential shown in the last decade remained intact.
”Most of our investments continue to perform extremely well. They still have a lot of cash flow and they didn’t have major problems with respect to the credit crunch,” said Soud Ba’alawy, chairperson of the Dubai Group, a major Gulf investment house.
”We’re looking for more opportunities to invest in Africa,” he said. — Reuters