13 April 2014

Growth in Africa: high, fragile and unequal

The UN Economic Commission for Africa recently published its yearly Economic Report for 2014. Its title is ‘‘Dynamic Industrial Policy in Africa’’.

In its analysis of recent economic evolution, the report underlines that economic growth in Africa was around double of world growth, even though it was a little slower in 2013 than in 2012. Exports towards the rest of the world, mainly primary products, have grown, while intra-African trade stagnated. The main constraint to a more rapid development is, according to the report, a lack of funding of investment, the increase of which is considered a top priority. Perspectives are however very promising, mainly because of ‘‘relatively high commodity prices, increasing domestic demand, easing infrastructural constraints, ever-tighter trade and investment ties with emerging economies’’.  But growth remains fragile because dependent on the situation in Africa’s main partners. It should however be of 5% in 2015.

Between 2009 and 2013, the growth champions of Africa have been Ethiopia, Libya, Zimbabwe, Ghana and Liberia (more than 7.5% growth annually). The least performing countries have been South Africa, Sudan, Madagascar and the Central African Republic (less than 2% growth per year).

From a social point of view, there was progress, but it was below what would be required to achieve the Millenium Development Goals: high rates of primary school enrolment, diminishing extreme poverty in some countries, decline in under-five mortality, fall in maternal mortality rates and reduction in HIV/AIDS prevalence and mortality.

However, growth did not lead to a comparable decrease in poverty and social services remain quite insufficient. Inequality in income distribution is very high: income of the poorest 20% is often below 10% of total income, while the richest 10% control between 25% and 50% of total income generated every year. ‘’Most Africans are locked

into vulnerable jobs and low productivity... The contribution of manufacturing to aggregate

output and GDP growth has either stagnated or declined in most countries’’.

One cannot but say that growth in Africa, although double from that observed in the world, remains fragile and dependent on the rest of the world, and it generate inequality. This could be the reason for the World Bank to re-discover that ‘‘ending poverty requires more than growth’’! But the solutions proposed by the World Bank in a recent report are all but convincing, as they do not challenge fundamentally the nature of economic growth, but rather seek to handle the resulting situation with social programmes. Beautiful analyses that call for more data collection on the poor, but very few solutions!

   

Will the poor be objects of studies and ‘‘beneficiaries’’ of programmes for ever? Or will they be given real opportunities to be in charge of their own development in a world where economic giants dictate policy?

Last update:    April 2014

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