Staff Writer
The World Bank and the International
Monetary Fund (IMF) have presented some amazing news for Africa.
According to a recently released report, Africa Pulse, Africa
will experience a 5.4 percent growth rate this year, when you remove South
Africa’s sluggish economy from the calculation. Reports of good percentage
growth for Africa’s economy have been arriving for some time; this is neither
the first time nor, hopefully, the last. But the report every African would
appreciate seeing is how these strong growth rates translate into competent
civil service; decent roads; factories that produce durable goods; increased
access to drinking water; and African economies producing a wider array of
value-added goods. It has become clear, over the numerous years that strong
growth numbers have been reported for the continent, that they stubbornly do
not translate into a noticeable change in the plight of everyday Africans. The
report’s accompanying statement from Obiageli ‘Oby’ Ezekwesili, the World
Bank’s vice president for Africa, and a former Nigerian
minister of mineral resources, expresses this concern succinctly:
“In view of the turbulence that has beset the
global economy in the last five years, many would be right to think that the
prospects for Africa are terrible. But as this issue of Africa’s Pulse shows,
African economies continue to show resilience and some of the fastest-growing
economies in the world are now in Africa. The urgent agenda remains sustaining
the macroeconomic reforms while accelerating the structural reforms that will
deliver the right quality of growth that creates jobs and raises incomes on the
continent.”
African economies are disproportionately reliant
on natural resources—oil and raw materials, for the most part. Oil
exporting sub-Saharan countries are projected to grow by 7.3% in 2012, buoyed
by oil production in Angola. South Africa, the one exception, is experiencing a
slower growth rate than the rest of the continent. It is because it is the only
country in Africa that has a healthy percentage of its Gross Domestic Product
(GDP) coming from value-added products meant for consumption by developed
countries—mainly Europe—where demand has slumped due to the global
financial meltdown. Europe accounts for one-third of South Africa’s
manufactured goods market, which means the continent-wide economic slump has
eaten into South Africa’s growth. The strong growth the report refers to comes
from the recent high demand for the raw materials Africa has historically
provided the global market.
These raw materials do not leave the continent
in a value-added form, which would be the case if the continent had factories
to manufacture the products. Investments in manufacturing—the necessary next
step for Africa to realise sustainable growth and development—are not coming.
The governments of countries who see their treasuries swell during periods of high-priced
raw materials and crude oil do not invest in manufacturing that
would turn those raw materials into the value-added products that are worth
three to four times more on the global market. Eventually, the global prices
for these raw materials fall—it is their nature to fluctuate since their prices
are based on speculation—and Africa’s treasuries bottom out accordingly.
The pendulum has swung like this for some time
now. It is certainly great news to hear that the global economic crisis has not
left Africa a victim as many had feared. It should, however, not be taken
lightly the immediate threats to this good news. Record droughts and crop
failures have been register in recent months, and a few more are expected to bring grave realities on millions.
This good news, and many like it to come in the future are opportunities to
create lasting and sustainable results that better the lives of Africans. The
continents people should not live at the mercy of speculative commodity
markets. We have seen how detrimental this has been in the past.
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