Despite Wealth of Resources, Africa Lags Economically
“Delivering on Africa’s Promise” is this theme of this year’s World Economic Forum on Africa in Cape Town, where some 1,000 delegates from business, government and non-government organizations gathered to discuss how to improve upon the continent’s recent economic growth.
But according to this year’s Africa Competitiveness Report, whose release annually coincides with the three-day summit, that promise is far from being met.
Researched in collaboration with The World Bank and the African Development Bank, the World Economic Forum report ranks Africa as the lowest-performing region in the world; fourteen out of twenty of the world’s least competitive economies are African — a dismal record considering the continent’s resource wealth and large labor pool.
Despite some economic progress, however, analysts such as Tomas Sales of the United Nations Development Program (UNDP) say the continent’s recent gains still leave something to be desired, and that African economies still lag too far behind the rest of the world.
“Over the last 15 years, give or take, it’s been growing over 5 percent. Even this year, it’s projected to grow 5.3 [percent], or something around that. But the question is: Is this growth also benefiting people?" said Sales. "Simultaneously, with the fast growth we see growing inequality, exclusion, and disparity. And this is a matter of concern because, you know, everybody says, ‘Look, we see the growth. This is not inclusive growth. We don’t see the benefits spreading around.'"
To that end, the UNDP is reaching out not just to governments, but to African businessmen. The agency recommends that businesses of all sizes seize upon Africa’s greatest asset: its people.
“There have been a lot of changes, lots of reforms, lots of changes within Africa from the government level," said Sales. "But the question is at the micro level. We haven’t seen that much transformation yet. Companies, for instance, should get involved directly with low-income people. They should help them as part of the value chain, as producers, consumers, entrepreneurs, employers. This is the definition of inclusive business.”
Another reason Africa is lagging, however, is its lack of infrastructure, which is partly a legacy of colonialism, and, more recently, poor governance and planning. On Friday, the forum released a report detailing a plan to accelerate infrastructure and increase integration between African countries.
Some experts acknowledge that things are getting better. Sub-Saharan Africa has seen significant economic growth, and progress has been made in efforts to reduce the plight of the continent’s poor.
South Africa remains the continent’s economic leader, according to the World Economic Forum report. The nation recently became the newest member of BRICs, a group of emerging economies comprising Brazil, Russia, India and China.
Domestically, researchers recently noted a boom in the South Africa’s black middle class, which has more than doubled to more than 4.2 million people.
But that good news comes against a dismal backdrop. The latest government figures put the nation’s unemployed at 4.6 million people — more than 25 percent of South Africa's work force.
Source: Voice of America
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