Keeping Africa’s growth up, poverty down
July 12, 2012
The global economic crisis, which started in 2007, has not spared the African continent. Slower growth was exacerbated by high food and fuel prices, and by political unrest in several North African countries. Yet, in 2012 growth has recovered and is forecast at the highest pre-crisis level.
With the uncertain outlook for global economic growth come deep concerns about the prospects for the various measures of development in Africa. There has been insufficient progress in critical areas such as poverty, food security, employment creation, and child and maternal health on our continent.
These challenges are being amplified by the inequalities in development outcomes. Moreover, sustainability is undermined by growing populations and worsening environmental degradation and climate change. These pressing issues will need to be effectively addressed in a post-2015 agenda that must be shaped by the people of Africa.
Policy-makers need to be particularly concerned that growth translates into broader gains in human welfare, that the benefits of development accrue more evenly and that issues related to sustainability of development are effectively addressed.
These are uncertain times for the global economy. The recovery in the US remains sluggish, the debt crisis in Europe is unresolved and more alarmingly, there are signs of a slower growth in China.
The global economic crisis, which started in 2007, has not spared the African continent. According to the 2012 African Economic Outlook produced jointly by the African Development Bank, the Organisation for Economic Cooperation and Development, the United Nations Economic Commission for Africa and the United Nations Development Programme, economic growth in Africa slowed from an average of 6% in the years prior to the onset of the crisis to 3.1% in 2009.
In addition to this slow-down in economic growth, in 2011 variables such as high food and fuel prices as well as political unrest in several North African countries also exacerbated an increase in slowed growth on the continent. However, in 2012, the recovery has picked up and is forecast to grow at 5.8%, the highest level of growth pre-economic crisis.
Forecasted growth prospects are underpinned by an expected continuation of good economic policies, strong demand from emerging markets and from within the African region, as well as rising commodity prices. However, several risks remain for the growth prospects for Africa.
These risks are linked to the uncertainty in the global economy, lingering political challenges within several countries and the narrower space that exists in many countries for further counter-cyclical policies. Countries that face structural constraints related to un-diversified economies, poorly developed infrastructure, shrinking export revenues, and a lack of long-term financing remain particularly vulnerable.
With the uncertain outlook for economic growth in the rest of the world come deep concerns about the prospects for continued reduction in poverty and improvements in other measures of development in Africa.
Even before the crisis, accelerating progress towards meeting the United Nation’s Millennium Development Goal of cutting poverty in half by 2015 seemed incredibly ambitious. There has also been insufficient progress in critical areas such as food security, employment creation, and child and maternal health on our continent.
These challenges are being amplified by persistent inequalities in development outcomes. Moreover, issues of sustainability of the development process itself are intensifying given pressures from rapidly growing populations and the increasingly negative effects from environmental degradation and climate change. These pressing issues will need to be effectively addressed in a post-2015 agenda that must be shaped by the people of Africa.
Bolstering economic growth in Africa is critical but it is clearly not enough. Recent events in North Africa and elsewhere have once again shown that aggregate advances in economic and social indicators, impressive as they may be, must be accompanied by empowered citizens and equal opportunities.
Policy-makers need to be particularly concerned that growth translates into broader gains in human welfare, that the benefits of development accrue more evenly and that issues related to sustainability of development are effectively addressed. A central question facing Africa today is therefore how to foster inclusive and sustainable development in the current age of global economic uncertainty.
This article was originally published in the Mail & Guardian Thought Leader as part of a series of articles based on my current research and work at a new United Nations think-tank in Geneva.
Pathetic! Empowering people? Let’s start by making these people having anything to be empowered about! Africa is the only continent where drought or other natural calamities leed to starvation or malnutrition and one does not change that by invoking external circumstances as a cause or even a contributing factor. It’s only when the shit hits the African elites that change will occur!
Fabulously Interesting Piece of Article. Great shot and keep them coming…
If African policy makers are looking for concise characterisation of the economic outlook, here it is.
Beyond acknowledging the progress, Lee-Roy rightly raises deep concerns about the continued reduction in poverty, improvements food security, job creation and health outcomes across Africa. He went on to point out that these challenges are magnified not only by the global economic uncertainty but also “… by persistent inequalities in development outcomes”.
To a large extent, the global economic uncertainty is beyond the ambits of African countries. The same victims card cannot be played with regards to the second pillar of the Lee-Roy problem – “persistent inequalities in development outcome”. A critical avenue to dealing with it is to bolster economic growth with the hope that it trickles down in the Hayekian spirit. Alas, Lee-Roy Cherry warns, economic growth can only take us far, but not close enough.
Perhaps, country specifics should inform the way forward because, like jackets, some policy recommendations fit some countries than others. Nevertheless, experience across the continent and elsewhere suggests some jackets are ill-suited for almost all African countries. Despite its populist appeal, tackling inequality from the outcome side is one such ill-suited jacket.
I submit that African policy makers should endeavour to address inequality mainly from the opportunity side. It requires a deliberate and persistent effort but it is a more appropriate way to function a society where birthplace, gender and ethnicity/race are irrelevant explanations of the socioeconomic wellbeing.