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Bank’s new strategy reflects growing Africa optimism

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Bank’s new strategy reflects growing Africa optimism

18th March 2011

By: Terence Creamer
Creamer Media Editor

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The optimistic tone of the World Bank’s new Africa strategy, which was released earlier this month, is hard to miss, or to ignore. The 43-page document kicks by saying “Sub-Saharan Africa in 2011 has an unprecedented opportunity for transformation and sustained growth”.

The statement is supported by four key reasons. Firstly, until the onset of the global economic crisis, African growth was averaging 5% a year for a decade, accelerating to over 6% between 2006 and 2008. And that growth was also widespread. Secondly, progress has been made in many countries towards meeting the Millennium Development Goals (MDGs). Thirdly, Africa’s private sector is increasingly attracting investment. And lastly, the climate for market-orientated, pro-poor reforms is proving “robust”.

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“Putting these factors together, we conclude that Africa could be on the brink of an economic takeoff, much like China was 30 years ago, and India 20 years ago,” the bank avers.

The associated ten-year vision is equally compelling.

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It envisages a continent where, for at least 20 countries, per capita income would be 50% higher than today (implying per capita gross domestic product (GDP) growth rates of 3% to 4% per cent a year) and that another 20 countries would grow at an average rate of 1% to 2%. If achieved, the poverty rate would decline by 12 percentage points and at least five countries would achieve middle-income status.

This growth would be achieved, the vision continues, with a production mix that is considerably more diversified and where agricultural productivity will increase substantially, with 15 countries registering at least 5% average annual agricultural GDP growth. Africa’s share of world trade would double to 8%, with regionally integrated infrastructure providing services at globally competitive costs. Further, human development indicators would go well beyond the MDGs to achieve quality goals in health and education.

But for this vision to be achieved, women’s legal capacity and property rights would have to increase. Climate change adaptation measures would have to be put in place, while public-sector governance and accountability would have to be materially bolstered.

Crucially, too, access to infrastructure will have to be doubled so that at least half of households, for instance, have power. Herein lies the rub, because, while few would question the tremendous benefits associated with closing an infrastructure backlog (currently standing at $93-billion), in many instances, investments would need to be cross-border in nature.

In other words, the vision hinges on strong, uncorrupted leaders, who grasp the virtue of accountability and, as importantly, of regional cooperation, even when this may involve some dilution of sovereignty.

In the absence of such leadership, Africa will again fail to take full advantage of the current strong demand for its commodities, which, if well managed, could provide the platform for further economic diversification and employment creation.

So, while the bank’s new strategy correctly reflects the growing sense of optimism across Africa, it also places a heavy burden of responsibility on the current generation of African political leaders. Whether they rise to the challenge or not will determine the continent’s future global positioning, which, as of today, is right at the bottom.

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