Washington, DC — Development indicators are sending mixed signals about the African continent said a World Bank panel of experts briefing reporters Wednesday on the Bank's new report: African Development Indicators 2002.
Although Africa's Gross Domestic Product and exports are expanding, hardship and health problems are growing faster than the increased income needed to deal with those problems. The average annual growth rate in African economies is 2.6 per cent; it would need to be 7 per cent in order to achieve the globally agreed target of halving poverty by 2015.
According to the Bank's figures, foreign assistance to Africa declined from US$17.2bn in 1990 to US$12bn in 1999. "And this decline is continuing in 2000," said Alan Gelb, World Bank Chief Economist for the Africa Region. "Real levels of foreign assistance to Sub-Saharan Africa have fallen at 7 per cent every year during the 1990s. It was a pretty rapid, sustained fall."
Foreign investment has tripled since the mid-1990s, but it has been uneven, with the bulk of it going to oil-producing and mining nations.
As well as being starved of investment, African agricultural exports are hurt by protective subsidies for agriculture in rich nations. "The poor countries just don't have the resources to fight back against large subsidies from rich countries," said Gelb.
September 11 has hurt investment, the Bank says. Those terrorist attacks "likely will make investors even more risk adverse, regardless of African economic conditions in the near-term."
The report "underscores the fact that the challenge of Africa is indeed the current fundamental development challenge that faces all of us who are in this business," said Callisto Madavo, the Bank's Vice president for the Africa Region.
HIV/Aids,in particular, presents an ugly picture, says Gelb. It is "ravaging the skills that are needed to supply central services to the population...there are connections here between education, health and nutrition, which are going to be very difficult for Africa to overcome."
Increased foreign assistance, more foreign investment and greater access to world markets are necessary to reverse the effects of HIV/Aids, civil wars and slowed economic growth, argues the report.
The Bank believes that Western countries must urgently make good on their promise to increase aid, and begin to dismantle the protectionist measures - barriers against imports and subsidies for sectors in their own economies - that make it so hard for poor countries to compete
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Asked whether assistance demands in Afghanistan would affect assistance flows to Africa, Director of Development Policy Ian Goldin said he thought the level of U.S. assistance was going up, but "not enough." Nonetheless, he added, the promise of increased aid from the United States, as well as from other donors, represents movement "in the right direction."
At the international "Financing for Development" conference in Monterrey, Mexico, last month President Bush promised to increase aid to developing countries but only where the recipients could demonstrate 'sound' social and economic policies. Yet even countries with a good record on economic reform, like Mozambique, have seen their aid flows decline.
Goldin acknowledged that while the Bush administration seems committed to a larger pot of assistance money, how it will be allocated "remains to be defined."
In principle, he says, there should be greater focus on countries where poor people live. "One can get the highest returns from increased aid in many African countries, and the levels of aid to Africa which have been declining are not in line with [their] improvement in domestic policies... increased aid to Africa will make a huge difference."
