DEVELOPMENT-AFRICA: Slow Growth Undermines Efforts to Fight Poverty

By IPS Correspondents Reprint | | Print |

Anthony Stoppard

JOHANNESBURG, Jul 29 2003 (IPS) - Africa is a continent of diverse countries, some succeeding better at the challenges of social and economic development than others, says South African-based UN Development Programme economist, Azghar Adelzadeh.

"Some countries are growing, while others are basically stagnant. But you can no longer put them all together and simply describe Africa as a basket-case," he says.

Adelzadeh says he is confident Africa will pull through. "I feel optimistic about Africa, although the problem remains that in comparison with other parts of the world, like Asia and Latin America, growth and development are still too slow and diverse," he says.

A new report, by the Ethiopia-based Economic Commission for Africa (ECA), which will be released on Jul. 31, also touches on growth.

The report, "Accelerating the Pace of Development", looks at how Africa can achieve the economic growth rates necessary to attain the Millennium Development Goals (MDG), which broadly aims to halve world poverty by 2015.

Africa is lagging and at its present rate of economic and social development is only likely to reach this goal by 2047, according to the UNDP.

More than 350 million people, over 50 percent of Africa’s population, live below the poverty line of one U.S. dollar a day, according to the World Bank.

The ECA says if finds the economic performance on the continent last year lacklustre, with growth slowing from an average of 4.3 percent in 2001 to 3.2 percent in 2002.

"The slowdown is a reflection of the weaker global economy, the effects of low commodity prices in 2001, the droughts in southern and eastern Africa, and the political and armed conflicts in Cote d’Ivoire, Zimbabwe, Madagascar, and the Central African Republic," says a statement released ahead of the launch of the ECA report.

ECA says some well-managed economies with a record of stability and good governance, managed to buck the trend, with Uganda achieving 6.2 percent, Rwanda 9.9 percent and Mozambique 12 percent growth rates.

UNDP administrator, Mark Malloch-Brown, warned that Africa was in danger of being left behind the rest of the world in efforts to improve the living standards of the poor. Thirty-four of the world’s poorest countries are in sub-Saharan Africa. "But those trends can be changed," he told journalists in Maputo, Mozambique last month.

Mauritius, Tanzania, the Seychelles and Mozambique have achieved sustained gross domestic product (GDP) growth rates close to the seven to eight percent needed to meet the poverty targets.

"Swaziland and Malawi both increased school enrolment by over 20 percent in the past decade. Senegal and Uganda have shown the way to stemming the spread of HIV/AIDS. Mali improved access to potable water by 12 percent. Chad improved access to sanitation by 11 percent. Egypt, the Gambia, Cape Verde and Tunisia reduced child mortality by one-third or more," says ECA.

Highlighting lessons for countries that are trying to fast-track their economic development, ECA points out: "The importance of fiscal discipline is clearly demonstrated by the performance of the Ghana economy, which is hobbled by massive public expenditure hikes during electoral cycles.

"The Mozambican experience demonstrates the importance of implementing pro-poor policies in order to tackle deep pockets of poverty. For, while the economy there has grown by over 10 percent in the past few years, over 60 percent of the population still lives in poverty," it says.

The ECA’s Economic Policy Stance Index shows that countries that have entrenched economic reforms, like Mauritius, have managed steady growth over long periods with lower poverty rates. These economies provide the best opportunities for the private entrepreneurs to flourish.

"The experience of Egypt shows that public service reforms need to focus on strengthening its ability to manage the economy, rather than concentrating on quantitative targets like overall wage bill and staffing levels," adds ECA.

It says medium-term economic prospects for Africa depend to a great extent on external developments. Unfortunately for Africa, the World Trade Organisation (WTO) talks on farm trade reform – by far the most important issue in the Doha development round for Africa – appear to have faltered.

The United State’s decision in May 2002 to introduce a six-year 51.7-billion-U.S.-dollar farm bill increasing crop and dairy subsidies by 67 percent will not help Africa’s prospects. ECA warns that the subsidy will reduce agricultural prices, making it difficult for small African countries to compete on world markets.

Malloch-Brown said: "Recent formulas of good governance and open markets are necessary – but not enough. Lack of progress is not about lack of trying to put good institutions, policies and growth in place. It is about supplementing those necessary steps by addressing deeper structural handicaps such as geographic isolation, undiversified commodity-dependent economies, exclusion of women and a deterioration of Africa’s top soils that is undermining the agricultural base."