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Home >> Business
UPDATED: 11:22, June 04, 2006
Roundup: Africa's rapid economic growth expected to sustain
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Growth has become Africa's new development strategy and the current high growth rates being experienced by many countries in the continent can be sustained through political stability and good macroeconomic policies.

"The most important thing is that Africans have been committed to growth, " said Maria Ramos, Group Chief Executive of Transnet, South Africa, in a closing plenary debate held here on Friday for the 16th World Economic Forum on Africa.

Where the current African economic growth came from and how to sustain the growth is the central topic of the three-day meeting, attended by over 700 delegates from 39 countries across the world, including presidents of three African countries and other political and business leaders, most of whom are optimistic about the future of the continent.

"Should growth be the new strategy for Africa?" asked Tanzanian President Jakaya Kikwete. "The answer is emphatically yes," he said. Africa is enjoying a record economic growth in 30 years with its 2005 growth rate registered at 5.8 percent.

Though it is also true that high oil and commodity prices had helped to push up the continent's growth rate, there is ample reason for optimism.

Growth rates have increased thanks in large part to greater peace and stability on the continent, noted Armando Emilio Guebuza, president of Mozambique.

"The African continent has emphatically and irreversibly turned the corner," said Haiko Alfeld, Director of World Economic Forum on Africa.

Meanwhile, more than 52 percent of Africans are optimistic about their future, according to the result of a Gallup survey released at the start of the summit, more hopeful than the rest of the world (48 percent) that 2006 will be better than 2005.

Nigerians are the most optimistic with a percentage of 61 thinking the year 2006 will be better, closely followed by people of South Africa, Senegal and Guinea Bissau. The scores for the other four countries were below 50%: Gabon 47%, Morocco 37%, Cameroon 31% and Kenya 26%.

However, many challenges still remain, including the spread of HIV/AIDS, a shortage of skilled labor, high unemployment, a dearth of infrastructure, and the fact that Africa has been identified as the region that may fail to meet the Millennium Development Goals within the identified time frame. It is impossible to solve all the problems overnight.

South African President Thabo Mbeki said at the closing plenary that poverty reduction, job creation and education are vital to the future growth, while highlighting that good governance will drive the continent to develop faster and better.

Participants said that the continent's further growth had to be driven by the private sector, which is where the current dynamism in Africa is taking place, for example in the mobile phone and ICT sectors.

Lars Thunell, executive vice-president of International Finance Corporation (IFC) based in Washington DC, emphasized the importance of developing African companies and entrepreneurs, particularly through developing the financial sector, removing bottlenecks to business and reducing bureaucracy.

The issue of the effectiveness of aid was also debated at the meeting. William Easterly, New York University professor, said that growth in Africa is not going to come from aid but from private capital inflows and trade. He emphasized the traditional practice of doubling aid to Africa was not the key to greater prosperity.

Tanzanian President Jakaya M. Kikwete said that official direct assistance is crucial for countries with minimal resources, such as Tanzania, and that its management and effective delivery should be questioned, rather than its usefulness for development.

The heads of three African states who attended the meeting all highlighted agriculture as a key area for future growth, with manufacturing, infrastructure development and ICT being believed to be important too.

Africa's growing relationship and cooperation with China and India came under the spotlight on the second day of the meeting. The point that the two emerging economic powers will bring Africa opportunities and hope is prevalent at the summit.

"The success of relationships with India and China depends on how we work together," Firmino Mucavele, the chief executive of the New Partnership for Africa's Development (NEPAD) told the meeting.

"India and China, they need Africa," he said, highlighting that Africa's resources gave it a comparative advantage in mining, agriculture and tourism.

The meeting concluded that growth has to come from inside Africa, led by Africans themselves. They need to make the best use of resources and new capital being invested in the continent.

Source: Xinhua

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