In the brink of a major transformation if it sustains what has come to be called a remarkable economic growth Africa has registered for years now, the black continent is faced with plenty of problems that lay ahead.
With at least six of the world’s 10 fastest growing economies belonging to the continent, Africa is said to have been registering phenomenal growth in the recent decade.
Ghana, Liberia, Democratic Republic of Congo, Mozambique, Angola and Ethiopia dominate the list of fastest growing economies in the world and many more countries in the continent where the potential for growth is still high, are catching up, according to recent media reports.
Subsequently, while the percentage of the poor is declining for the first time in decades, a glaring inequality that, according to African Development Bank’s President, has been an increase course is among the key issues African leaders need to address.
“If this meeting was taking place 10 years ago, the issue would have been how to mobilize aid for Africa. But the discourse has changed,” Donald Kaberuka, President of the Bank, told journalists on Thursday, May 10.
“…at a time when the global economy is undergoing a tectonic shift, we have had a good decade, resilient to shocks… but there are indeed inequalities that are growing.”
He, nonetheless, stated that the continent has managed to keep the growth momentum on.
Still the poorest continent on earth, Africa is, therefore, faced with sustaining its growth in a scale that lifts hundreds of millions out of poverty, according to Kofi Annan, Former UN Secretary General and one of the co-chairs of the Forum.
Rural Africans are mostly overlooked in the economic policies of African countries, hence are not benefiting from growth, according to him.
“These are all not issues that are to be addressed overnight. But we have to set the right policies. Government’s should be concerned about the welfare of their people and put social and economic policies that…touch the lives of individuals – whether they are in the villages or in the cities,” Annan said.
But Africa remains a continent of optimism.
About 52 per cent of the world’s populations currently live in urban areas; by 2025 this should increase to 58 per cent. Nearly all this growth will take place in emerging-market economies, particularly Africa, as migrants from the countryside move in search of jobs,
“There [are] a lot of things to be optimistic about (Africa) today,” said Doug MeMillon, President of Wal-Mart, world’s largest retailing company that is eying growing African markets including in Ethiopia. “We were attracted to Sub-Saharan Africa and made our investment because we believe in the growth of the region; we think something is happening here.”
Wal-Mart recently decided to invest 2.4 billion USD in Africa, and its chief says that decision is because the company is excited by the numbers about Africa it looked at earlier.
The current year is even more interesting because it is now possible that Africa could become the second fastest economy in the world.
About 60 percent of Africa’s population is aged under 30; an ideal age group of human resource that the rest of the world – especially the aging west – envies but could also spell crises, as seen in North Africa, due to unemployment.
That justifies the assertion by panellists at the main session of the Forum which lasted the whole of Thursday that economic growth alone is not sufficient to build Africa.
The panellists including Annan, Kaberuka, McMillon and Gao Xiqing, President of China’s Investment Corporation (CIC), as well as Prime Minister Meles Zenawi along with at least four other African leaders, among others, put out their perspectives of Africa’s economic future. Some of them argued the continent needs a corruption-free breed of leadership to remain on course but with accelerated and sustainable growth, if the growth has to benefit hundreds of millions poor in the continent.
That makes Africa a continent that has seen the best decade of the past 50 years, with still plenty challenges to be tackled, Kaberuka argued.
“We should not confuse economic growth with economic transformation,” he said. The structure of African economies has not changed fast enough and countries remain vulnerable to external shocks. Public policy choices should target ways to leverage wealth from natural resources for broad-based, sustainable growth, according to him.
Kaberuka identified two key drivers for the future: the education of children of the poor as a tool to address generational change, and the development of small and medium enterprises to close the wealth gap.
Africa has a blank sheet of paper before it and is in a position to create a new template for its future, Gao Xiqing of CIC said indicating the continent is at crossroads. However, it is important for African countries to ensure their growth is also as inclusive as possible, learning lessons from China, which has prioritized growth over development and is now facing challenges such as huge wealth inequality and environmental problems.
“We cannot talk of growth when millions of people are left behind,” Annan, who chairs Alliance for a Green Revolution in Africa (AGRA), argued.
African governments should put in place policies that allow equal access to opportunities to avoid dissatisfaction in the future, according to him.
Klaus Schwab, Founder and Executive Chairman of the World Economic Forum told participants that the mood in Africa today is quite different from what it was 22 years ago, changed from one of cynicism, to be later replaced by scepticism, then realism to today’s atmosphere of pragmatic optimism.
(Omer Redi is a Correspondent for Inter Press Service, and Media and Communications Consultant based in Addis Ababa. He can be reached through email@example.com)