Poverty: Africa faces huge challenge

from The Mail and Guardian

Fran Blandy

African economies face a daunting challenge to catch up with the rest of the world after missing out on two decades of growth, a new report by the World Bank said on Tuesday.

The author of the study, Benno Ndulu, said Africa has been losing the battle against poverty in comparison to the rest of the world, but expressed hope there is enough ambition to reverse the current situation.

"With the region hosting 10% of the world's population but a staggering 30% of the world's poor, the challenges facing the region are enormous but not insurmountable," said the report.

Ndulu said that while Africa had kept pace in economic terms with much of Asia in the immediate post-war period, it has since lagged spectacularly behind.

"African countries missed out on two decades of global growth," said Ndulu at the launch of the report at a location on the outskirts of Johannesburg. "Other countries have made strides in addressing poverty and in Africa we see the reverse happening."

Asian countries had "grown not only at a rapid pace but steadily ... In Africa, each country has had a spurt of rapid growth (in 1960s and 70s) but between 1975 and 1995 most countries went into deceleration," he added.

Ndulu said the percentage of the population throughout the continent who were classified as living in extreme poverty was 36% in 1970 but had reached 50% by the end of the century.

However, some countries' paths have been radically different.

Six countries tripled their per capita income between 1960 and 2005, and nine lost ground, said Ndulu.

"The critical point is that frequently, over the long term, the tortoise beats the hare ... Many African countries made policy changes in 1974 that continue to haunt them today," reads the report.

Xolile Guma, deputy governor of South Africa's central bank, said the economic woes experienced by many countries stemmed from governments' failures to stick to their policies.

"Policy slippage is often the cause of diversion from the kind of growth path you would have achieved with consistency," he said in a debate that followed the launch.

Another factor identified by the study as hampering growth is age dependence, with the bulk of the population "on the youthful side."

In Africa's favour are lessons learned by other countries that have grown rapidly, as well as available technology that can help speed up growth. Ndulu said Africa should not be afraid of looking at unorthodox approaches to growth.

"Africa can take advantage of being a late starter -- it's not always a curse," he said.

To turn the situation around, the report recommends improving the investment climate, infrastructure and institutional capacity and innovation.

Despite the continent's economic performance over the last three decades, Ndulu said there are reasons to believe the future will be brighter.

"The challenges that Africa face are still phenomenal but the language of ambition that I hear is quite remarkable," he said.

"People are thinking in terms of prosperity."