[Africa] ...on the move but still battles poverty -report

from Reuters AlertNet

By Lesley Wroughton

WASHINGTON, Oct 30 (Reuters) - Economic growth in Africa is strong, exports are increasing and more people have access to health and education, but the continent is still battling high poverty rates, a new World Bank report said on Monday.

The bank's annual Africa Development Indicators for 2006 report said progress in halving poverty rates by 2015 is posing a challenge for most African countries, with nearly half of the continent's people still living below the poverty line.

The report said there were fewer conflicts on the continent, economic performance had improved and a dozen or so "high performers" had clearly emerged with growth rates of over 5 percent a year.

"Despite progress, a lot more needs to be done especially in the areas such as governance, civil society, private sector development, and human development, to make economic growth sustainable, less exposed and more resilient to shocks," the report said.

It said surveys of African firms also showed inadequate roads, inefficient ports and power outages hindered their efforts to access international markets.

The bank said Africa's infrastructure spending will need to double to $20 billion a year if countries want to reach the growth rates needed to meet the 2015 target for the globally agreed Millennium Development Goals, known as the MDGs.

It said African economies needed to grow about 7 percent annually and invest 5 percent of their gross domestic product in infrastructure to reach the MDG target.

Lack of infrastructure investment is starting to constrain growth even for economic stars like Mozambique, Ghana, Tanzania, Rwanda and Uganda, said John Page, the World Bank's chief economist for Africa.

"What we are beginning to see is that the lack of attention -- and I would say the responsibility has to be borne in part by the international community -- to addressing the infrastructure and institution-needs in these countries," Page said.

He said industrialized countries needed to make good on promises they made last year of increasing aid to Africa by $25 billion a year by 2010, which will help African governments invest in infrastructure.

Failing to meet those commitments would be a "missed opportunity," Page said.

Still, despite those promises, development assistance by industrial countries to Africa between 2006 and 2008 would consist mainly of debt relief and emergency food aid, the report said.

It said rebuilding infrastructure, tackling HIV/AIDS and malaria, and building competitiveness were medium-to-long term challenges for Africa.

"Realistically, the work will be done over a decade or more," the report said, adding that progress is bound to move at different speeds across the region.

In contrast to the economic "high performers," the report said 13 countries have averaged growth rates of only 1.3 percent.

Meanwhile, growth in Africa's oil-producing countries has been as high as 20.9 percent for Equatorial Guinea and as low as 1.7 percent for Gabon, the bank said.

The report said between 2000 and 2010 some $200 billion in oil revenues will accrue to African governments, while 2004 estimates of profits range from 9 percent of government revenue in Gabon to 56 percent in Equatorial Guinea.

Page said African countries had coped well with higher global energy prices compared to previous episodes of price increases.

"While many countries have sustained a hit, they have not really had the kind of growth deceleration that we saw in the past and it's a combination of favorable international circumstances (and) also much better economic management," Page said.