Cape Town — Africa’s prospects for economic growth are improving as a result of reforms in macro-economic management and trade policy, as well as better governance, the World Bank reports today.
In a study entitled Africa Development Indicators 2007, the bank says that “something decidedly new is on the horizon in Africa...Many African economies appear to have turned the corner and moved to a path of faster and steadier economic growth.”
Economic performance in the decade until 2005 reversed the “collapses” of the decade ending in 1985, and the “stagnations” of the ensuing 10 years.
“For the first time in three decades,” the report adds, “African economies are growing with the rest of the world. Average growth in the sub-Saharan economies was 5.4 percent in 2005 and 2006. The consensus projection is 5.3 percent for 2007 and 5.4 percent for 2008.”
Although highly-priced oil and mineral exports are driving much of the growth, the report says, “18 non-mineral economies, with more than a third of the sub-Saharan African people, have also been doing well.”
Citing factors within the continent which have created the good news, the report says: “Inflation, budget deficits, exchange rates, and foreign debt payments are more manageable. Economies are more open to trade and private enterprise. Governance is also on the mend, with more democracies and more assaults on corruption.”
Dealing in more detail with the role of policies and governance, the report says the continent is enjoying better growth prospects “because its leaders have undertaken major reforms over the past 10 years.”
The number of African countries which achieve an internationally-recognized “good performance” benchmark in macro-economic management and trade policy have risen between 1999 and 2006 from five to 15. And 27 of 36 countries evaluated have improved their performance.
Citing Gambia, Ghana, Kenya, Madagascar, Senegal and Tanzania, the bank says its recent data also “provide some evidence of better governance.” But it says four countries have undergone “large declines in governance indicators” – Central African Republic, Côte d’Ivoire, Eritrea and Zimbabwe.
And five countries still suffer civil wars, it adds, although that is fewer than the 16 afflicted in the late 1990s.