African economic growth from economic diversification
Tag: African economic, African economic growth
Summary: In spite of the global economic downturn, Africa's income is projected to increase by 4.5% in 2012. A recent World Bank report shows that poverty is declining at about 1% a year.
In spite of the global economic downturn, Africa's income is projected to increase by 4.5% in 2012. A recent World Bank report shows that poverty is declining at about 1% a year.
Child mortality, a critical human development indicator, is falling sharply. Countries such as Rwanda, Ethiopia, Gambia and Malawi have reported declines of 25-40% in under-five mortality over the last decade.
In 2001 Tony Blair described the state of Africa's poverty as "a scar on our consciences". Today the dominant narrative is that Africa will be for the first half of this century what Asia was for the second half of the last century.
Parts of Africa are enjoying economic growth inconceivable just a decade ago. According to the International Monetary Fund, seven of the world's 10 fastest-growing economies will be Africa.
Ethiopia, Mozambique, Tanzania, Congo, Ghana, Zambia and Nigeria are expected to expand by more than 6% a year until 2015. According to African Development Bank Chief Economist Mthuli Ncube, Africa's middle class is about 300 million and growing at 3.1% per year.
It is no secret that the demand for commodities such as oil, iron, gold and copper are driving growth. For example, in 2008, the Democratic Republic of Congo took $6 billion of Chinese money to build 3,840 kilometers of road, 3,200 kilometers of railway, two universities, 32 hospitals and 145 health stations. China got access 10 million tons of copper and 400,000 tons of cobalt.
Africa's growth gathered pace with the commodity of the 1970s but plummeted when commodity prices collapsed during the subsequent two decades.
I submit that the fundamentals necessary for stable and sustained growth are weak or totally absent in some countries. Celebrating Africa's growth is therefore both premature and mischievous.
It is premature because the magnitude of need is daunting. Africa is yet to make a dent on hunger and poverty. One person in four suffers from malnutrition and Africa remains the region hardest hit by food insecurity. It is mischievous because almost half of Africa's 1 billion people still live on less than $1.25 a day. Moreover, Africa contributes a paltry 2.6% of global GDP ($1.7 trillion; GDP of Britain is $2.26 trillion) .