News / Africa

Africa's Bright, Dark Economic Spots Get Attention

Economists say more outside investment is needed to boost Africa's recent economic growth
Economists say more outside investment is needed to boost Africa's recent economic growth

Multimedia

Audio
Nico Colombant

As the International Monetary Fund (IMF) and World Bank spring meetings kick off in Washington this week, Africa's economies are the talk of both guarded optimism and cause for concern.

Since the mid-1990s, economic growth in Africa has accelerated. The upward trend is continuing now despite sluggish recoveries elsewhere. World Bank officials expect the region's economy to grow 5 percent this year.

Economists and experts warn however against considering Africa as a homogeneous entity.  Brookings Africa Growth Initiative Director Mwangi Kimenyi is among these.  He spoke at a conference in Washington last month organized by the Carnegie Endowment for International Peace.

"It is very important to disaggregate these countries, remove the oil countries, because the drivers are different," said Kimenyi.  "Coastal [countries] are sometimes different from the landlocked, North Africa, and so on. But if you look at the countries that are doing well and they are not natural resource rich countries, they have tried to diversify their economies and they have become competitive in particular sectors."

Bright spots in African economies include Ghana's agricultural sector, Kenya's mobile banking, Lesotho's light manufacturing, Cape Verde's tourism and Botswana's mining.

Major obstacles in most African countries include insufficient schooling beyond primary levels, huge gaps between a small rich elite and the majority of poor, a lack of outside investment and limited regional integration.

Harry Broadman, the chief economist of U.S.-based Albright Capital Management, says the main impediment to better growth is poor governance.

"We can have all the other reforms that we want in the world, whether it is trade reform, whether it is education or the like, but unless we have a confluence between civil society and the political and economic leadership, we are not going to get very far in a sustainable way on the continent moving forward," said Broadman.

Shanta Devarajan, the chief economist of the World Bank's Africa region, also points to low labor productivity, which measures the ratio of output per hour's work.

"You see 70 to 80 percent of the labor force in the informal sector, mostly in single family household enterprises working on very low productivity activities and also unable to take advantage of any economies of scale, even of the type where you have a firm of 50 people you might be able to buy a machine that can increase your productivity," said Devarajan.

Devarajan says Africa's labor force is getting bigger and bigger, which is both a source of potential but also problems.

"We have seven to 10 million young Africans entering the labor force every year adding to a total stock of about 200 million," added Devarajan.

Beyond the overall numbers which point to strong growth, economists say there are more than a dozen African countries which are extremely fragile economically.

They also say most Africans continue to be extremely vulnerable to external shocks which can severely affect their livelihood, from soaring food and fuel prices, to climate change induced natural disasters, and the outbreak of health epidemics and recurring political violence.

You May Like

India PM Modi's Party Distances Itself From Religious Conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote Hindu-dominant agenda by luring Muslims and Christians to convert More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid