In search of a transformed Africa

Lower economic growth rates in both developed and developing countries would trap an additional 65-million people in poverty, based on a $2-a-day poverty line.

According to the World Development Report 2009, the latest estimates suggest that this year the global trade contraction could be the largest since 1929. This is a severe setback, especially for countries in sub-Saharan Africa where a large percentage of these people live.

The extent of these and other economic outcomes caused by the global economic slump was emphasised by Professor Justin Yifu Lin, chief economist and senior vice-president of the World Bank, during a recent lecture organised by Unisa’s college of economic and management sciences (Cems).

Lin said that these new forecasts, with research findings that sharply lower economic growth rates, pose a serious threat to achieving the 2015 millennium development goals. ‘Preliminary estimates for the 2009 to 2015 period forecast that a total of 1.4-million to 2.8-million infants may die if the crisis persists,” he said.

In the World Development Report 2009 World Bank president Robert Zoellick said that a billion people survive on less than 2% of the world’s wealth. These underprivileged people are mostly from the poorest and most isolated nations in sub-Saharan Africa and South and Central Asia.

The contribution that universities in sub-Saharan Africa can make to national development goals through their growing emphasis on interaction with businesses was recently researched.

Funded by the Canadian International Development Research Center, the research showed, inter alia, how university-business interaction has already contributed to the continent’s economic growth and social development.

At a recent round-table discussion of the research findings Dr Glenda Kruss, chief research specialist of South Africa’s Human Sciences Research Council and project leader, proposed the notion of a ‘responsive university” that can act on the demands of industry and meet broader societal needs.

Unisa is one of the country’s universities that has done considerable research on Africa’s economic development, including work for Nepad by the Cems.

Focused research includes a look at financial liberalisation and investment in Tanzania, interest rate deregulation in developing countries, the demographic, social and economic determinants and consequences of the HIV/Aids pandemic in Africa and the orphan problem (including the financial consequences) in selected African countries.

Trends in the provision of microfinance to the poor and the positive effects it has on an economy was researched by Dr Daniel Makina, who concluded that it is possible to achieve sustainable provision of microfinance to the poor without great cost to donors and the government.

‘Only the initial institutions targeted to be torch bearers would need assistance. Thereafter, the traditional commercial banking sector will embrace the microfinance market. Then risk-sharing partnerships between banks, development agencies and NGOs will ensure long-term sustainability,” he said.

Professor Olu Akinboade, director of Cems’ school of economic sciences, said several negative factors rendered Africa unattractive to potential investors, for example the fact that Africa accounts for 13% of the global population but contributes less than 1% of total world trade.

‘Relevant research has, however, helped the continent to perform better, improve its collective wealth and image and become more attractive to potential investors.”

Akinboade has published close to 50 research articles, including several development-related topics, in scientific journals.

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