Sunday, 21 October 2007

Growth in Africa: good news again

The positive sentiment about Africa expressed by Stephen Lussier in his recent blog was reflected this weekend by the IMF and World Bank. At their Annual Meeting, they announced that they expect Africa's growth rate - so critical to lifting people out of poverty - to reach 6 per cent this year and 7 per cent by next.

This is big news for two reasons. First, 7 per cent is the rate at which many have estimated Africa must grow to meet the Millennium Development Goals (though this was an estimate made 7 years ago, and considerably more is probably now needed to catch up). If it can maintain growth at this rate, Africa's economy will double in size in 10 years.

Second, it comes on the back of the little-noticed fact that Africa's growth has outperformed the world economy for the last 7 years. Africa's problem has not been one of achieving growth, but of sustaining it for long enough. The fact that the good news has kept coming is hugely significant.

The sort of policies being pursued by many African governments - to improve governance and enhance the climate for business - is starting to pay off - in terms of rising business sentiment and economic growth. Donors are also putting greater emphasis on boosting growth. The Annual Meetings also saw the launch of a new partnership to support stronger financial systems in Africa by Germany, the World Bank and the African Development Bank. While growth is not sufficient for poverty reduction, it is nevertheless absolutely critical.

2 comments:

Omodudu said...

I often find country specfc indeces to be more useful when if comes to drawing meaningful conclusion about the effective growth of African Economies. Great blog, just curious as to why the blog setup up outside the website itself. Could be detrimental in the long run. Blogs are very platform dependent. Jeep up the good job.

Digivu in South Africa said...

I'm no economist but am always astonished by the depth of needs even in the most advanced Sub Sahara African countries eg Ghana let a lone the worst eg Zimbabwe.

These growths we talk about and are happy to see and predict - do the match the countries needs? Don't we really need even higher growth rates?

What do we need to get past the first goal of meeting the MDGs?