[Africa] hits higher economic growth rate -World Bank

from the Tide

Sub-Saharan African economies grew by 4.8 per cent in 2004, for the first time exceeding the annual global growth rate, which was 4.1 per cent during the year, a World Bank report has shown.

The “World Development Indicators 2006”, released in Washington, DC, at the spring meetings of the World Bank and the International Monetary Fund (IMF), shows that 20 out of the 48 Sub-Saharan African countries grew at a rate of more than five per cent in 2004.

Growth in the oil producing countries of Nigeria, Angola, Chad and Sudan was pushed up by the recent rise in oil exports and the oil price boom, the report explained.

But 15 non-oil producing countries have shown median growth rates of 5.3 per cent since 1995, which the report says points to their potential for long-term growth.

“After many years, the continent is showing growth that could deliver much more poverty reduction than in the recent past,” remarked World Bank Chief Economist Francois Bourguignon in a press statement announcing the release of the report.

The World Development Indicators report, however, shows that Sub-Saharan Africa still has the highest poverty rate in the world.

In 2002, the report said, the continent had 300 million people, about 44 per cent of its population, living on less than one dollar a day, that was more than a 100 per cent increase from 139 million people in 1981, the report notes.

On the contrary, the report pointed out that the population of people living in extreme poverty in East Asia fell by 580 million people to 12 per cent of the population during the period.

It is currently projected that Africa’s poverty rate will remain above 38 per cent by 2015, far above the target of 22.3 per cent set in the Millennium Development Goals.

African countries suffering from conflict and political instability, such as Cote D’Ivoire and Eritrea or those left out of the commodity boom, such as Niger and Central African Republic, grew at less than two per cent rate.

Such low growth rates combined with the regional population growth rate of 2.5 per cent have limited the growth of the continent’s per capita income to 1.6 per cent since 2000, the World Bank report stated.

The report, however, pointed out that Africa’s income growth rate over the past four years has been equal to or exceeded that of the high income countries and has exceeded growth in Latin America.

The Bank report also pointed out that Sub-Saharan Africa remains a high-cost, high-risk place for business, with the result being less investment, less employment, lower incomes and less competitiveness.

Doing business in Africa, the report said, cost about 20 to 40 per cent more than in other regions of the-developing world.