Africas Growing Pains: The Final Development Frontier
The international community has proclaimed 2005 to be the year of Africa. A succession of high-level meetings are scheduled this year to focus on the obstacles and opportunities facing the continent.
Challenges are complex – from curbing HIV/AIDS and malaria, resolving conflicts and decreasing corruption to spurring growth, building infrastructure, and raising health and education levels.
Africa needs it all!
– Some have said that this is the make-or-break year for Africa, says Gobind Nankani, World Bank Vice President for the Sub-Saharan Africa Region.
Building opportunity demands action from both African leaders and their international partners. Yet, foreign aid to Africa has remained essentially flat over the past two years and trade barriers that hobble African exports to wealthy countries have proved difficult to dismantle.
As the World Bank repeatedly advocates, Sub-Saharan Africa needs more aid and better access to world markets, particularly agricultural markets where African foodstuffs could be competitive if rich country subsidies were cut.
Despite these looming challenges, some positive trends are emerging and Africans are taking charge of their development needs.
Highlighting Successes in the Region
Numbering 47 countries, sub-Saharan Africa is diverse and setbacks should not overshadow successes, as they often do.
– Recent events in Togo should not obscure peace in Sierra Leone or Angola, growth in Tanzania, or a housing boom in Ghana, says Nankani, pointing out some recent gains. Macroeconomic stability is becoming the norm in a region that once was plagued by high inflation.
African countries have shown that they can produce at a global level and compete on world markets.
Mauritius has successfully been exporting shrimp. Kenyan flowers are sold on London markets while Senegalese vegetables are offered in the Parisian grocery stores.
Fifteen countries, including Uganda, Ethiopia, and Burkina Faso, have seen their eoconomies growing on average more than 5 per cent per year since the mid-1990s.
Foreign direct investment is up. It rose to 8,5 billion US dollar last year, from 7,8 billion the previous year.
South Africa is becoming a significant investor throughout sub-Saharan Africa, while China is leading a wave of interest from Asia.
The challenge is to make sure that the growth is accelerated, sustained and beneficial for everyone, including the poor, women, youth and those living in remote rural areas.
– Previous growth spurs were sporadic and did not trickle down to all aspects of society, Nankani warns. Although a third of Africa has been growing at 5 per cent, this growth is just enough to keep the countries afloat and the number of poor people from rising. The growth should increase to some 7 per cent to help lift the region out of poverty.
Africans Taking the Lead
Africas new generation of leaders, from the New Partnership for Africas Development (NEPAD) and the African Union to sub-regional organizations like the East African Community, are taking responsibility for development.
– We see significant strides. Africans are working collectively to reduce conflict, integrate economically and accelerate progress, says Nankani.
African governments are also crafting poverty reduction strategies that fit their specific circumstances.
– The regions future depends on a global partnership where Africas international partners support homegrown development strategies, says Nankani. And promises need to be kept.
– Aid flows to African countries have been essentially flat, despite the Millennium Development Goals (targets to be met by 2015), domestic policy reforms and global attention, says Nankani.
The Worlds Eyes Are on Africa Now
Foreign aid is an integral part of Africas past and is an essential part of its future, asserts Phyllis R. Pomerantz, World Bank first Chief Learning Officer, in her recently published book, Aid Effectiveness in Africa.
Recognizing this, donors agreed in February to give 34 billion US dollar to replenish funds of the International Development Association (IDA ), the World Bank affiliate that gives grants and concessional loans to the worlds 81 poorest countries—almost half of which are in Africa.
Additional commitments include the publication in March of the assessment of Africas needs by the UK-led Commission for Africa , and a broad range of discussions at the G-8 meeting later in July.
Finally, the UN Millennium Summit in September will review progress toward halving the world poverty by 2015 as intended in the eight Millennium Development Goals. Many discussions will focus on how to help Sub-Saharan African countries, which are not expected to achieve the goals, to avoid falling further behind.
The worlds rock stars are joining in the efforts as well. Bono has become an ardent advocate Africa, calling on world leaders to ease the regions debt levels and do more to curb the spread of HIV/AIDS.
Ultimately though, for aid to succeed, Africa and its international partners must develop trusting relationships, says Pomerantz.
Trust rests on commitment, reliability, familiarity, transparency and honest and open communication.
– The quality of the relationship may be more important than influencing policy directions and ensuring successful outcomes than the money itself, she writes, adding that the international partners do not understand Africa as well as they should.
World Bank and Africa
The Bank is working to help Africans help themselves by lending money, sharing knowledge, building capacity and forging partnerships.
It is at the forefront of advocating for debt relief for the regions poorest countries, as well as in supporting countries emerging from conflict, assisting countries in the eradication of communicable diseases, including HIV/AIDS and malaria, and spurring economic growth.
To ensure that growth creates benefits throughout society, the Bank is placing priority on:
– Improving regional integration to enhance intraregional trade and lower transport costs for landlocked countries
– Developing Africas enterprises
– Improving trade, particularly creating access for African products on global markets
Many of Africas agricultural exporters are landlocked or far from the coast. Typically, a land-locked country in Africa has 50 per cent higher transport costs and 60 per cent lower trade volumes than a typical coastal economy.
Customs delays, roadblocks, arbitrary costs at the borders all tax trade within Africa. Therefore the Bank aims at
– Strengthening government capacity and improving governance
– Increasing the amount and effectiveness (harmonization ) of international aid
Africa Is Open for Business
In order for African countries to achieve their goal of self sufficiency, however, a robust private sector must be nurtured. – Africas private firms have historically been marginalized, Nankani says.
The region needs to build export industries leveraging agriculture and natural resources. Kenyas flower exporters are a good example to duplicate.
Sub-Saharan governments will bring in more than 200 billion US dollar in oil revenues over the next decade. If managed well, these resources can significantly reduce poverty.
But to thrive, businesses need a better environment. Currently, legal and regulatory hurdles, unreliable energy sources and poor roads stall production, slow distribution and limit trade opportunities.
Seven African countries are listed among the worst 10 countries in the world for starting a business, according the Banks study Doing Business 2005.
– African leaders are working to peel away this label of a high-cost, high-risk environment for business, Nankani says.
Mali, Senegal and Tanzania are among the countries hosting roundtables for investors and actively strengthening their business environments.
Moving Forward
Today a generation after the Live Aid concert in 1985 that united the world to alleviate famine in Ethiopia, the world has greatly changed.
So have Africas needs. HIV/AIDS and conflict have overtaken food shortages as the regions most pressing challenges, affecting one in five Africans.
But globalization and advances in communication and technology are opening new opportunities for Africa to lift itself out of poverty.
Africas challenges are great and goals are ambitious.
– But they can be realized if African leaders, African societies, and the international community work together in a real partnership, concludes Nankani.
Kilde: www.worldbank.org
