The fourth African Economic Conference is underway in Addis Ababa against a backdrop of declining growth across the continent. Forecasts for economic growth in sub-Saharan Africa this year have fallen well below the critical two percent mark.
Even though the global economic crisis is showing signs of subsiding, economists are continuing to lower expectations for growth in Africa.
As the annual conference began Wednesday, Abdul Kamara of the African Development Bank said forecasts of less than two percent growth indicate declining incomes, with millions of people slipping back into extreme poverty. "The crisis hit at a time when the continent was enjoying an average of six percent growth, and when the crisis hit we did estimates in November for growth of the continent overall, and at that time we were projecting three percent growth, and then in May we revised this projection to 2.3 percent growth. And currently as I speak, we have projections that range between about two percent growth for the continent as a whole, but if you look Sub-Saharan Africa, the growth figure is even below that. It is about 1.3 percent."
Kamara says the good news is that 2010 should bring the beginning of a turnaround that will bring with it many growth opportunities, if Africa is ready to seize them. "So 2010 would be a year we would see demand would start coming up ... but it would critically depend on two factors, what is happening in the developed world in terms of how economies are going to pick up and how that would translate into demand for our products. But more importantly what we Africans would do in the field of policy, diversification, but more importantly in the area of responding to opportunities that would be generated at the conclusion of this crisis."
This fourth annual conference will also take stock of the increasing recognition that while most development aid goes to the public sector, it is the private sector that is the primary engine of economic growth.
Among featured speakers will be William Easterly, the author of several provocative books that question whether development aid donors get their money's worth. The New York University professor argues that the real saviors of Africa are not aid agencies or government programs, but the people of Africa.The conference is sponsored by the African Development Bank and the U.N. Economic Commission for Africa. This year's meeting is expected to draw 400 academics and policy makers, as well as public and private sector operators and lending institutions.