Saturday, April 27, 2013

Africa Economic Growth Has Not Reduced Poverty Enough

Africa economic growth has not reduced poverty enough – World Bank

Apr 26, 2013
By Samuel Sanya

After more than 10 years of strong economic growth, the World Bank says Africa has been able to cut poverty on the continent, but not by enough.

“While the broad picture emerging from the data is that Africa’s economies have been expanding robustly and that poverty is coming down, the aggregate hides a great deal of diversity in performance, even among Africa’s faster growers,” said Shanta Devarajan, the World Bank chief economist for Africa, and lead author of the new report.

According to the World Bank’s latest Africa’s Pulse, a biannual analysis of the issues shaping Africa’s economic prospects, during the second half of the 2000s, Ethiopia and Rwanda saw their economies expand at 8% and 10%.

Devarajan notes that this resulted in a 1.3 to 1.7 percentage point yearly fall in their national poverty rates. In contrast, poverty reduction in some other countries has lagged far behind growth.

Economic growth in Sub-Saharan Africa is likely to reach more than 5% on average in 2013-2015 as a result of high commodity prices worldwide and strong consumer spending on the continent.

Consumer spending, which accounts for more than 60% of Africa’s GDP, remained strong in 2012.

The report forecasts that mid-term growth prospects remain strong and will be supported by a gradually improving world economy, consistent high commodity prices and more investment in regional infrastructure, trade, and business growth.

Welcoming the assessment that Africa continues to grow faster than the global average, World Bank vice-president, Makhtar Diop, noted that there is need for faster progress in areas such as electricity and food. “Without more electricity and higher agricultural productivity, Africa cannot prosper. The good news is that governments in Africa are intent on changing this,” said Diop.

The report suggests that the future lies in the promise of large revenues from mineral exploitation and rising incomes created by a dramatic expansion of agricultural productivity.

The large-scale migration of people from the countryside into Africa’s towns and cities, and a demographic dividend potentially created by Africa’s fast-growing population of young people will set the continent on a high economic growth path.

No comments: