According to a new World Bank report, 2005 may be the year when Africa "turned the corner" from poverty and debt to prosperity and wealth. In a continent that was once almost entirely dependent on foreign aid, there are now 16 countries that have achieved annual growth rates in excess of 4.5 per cent for more than a decade.
"Africa today is a continent on the move, making tangible progress on delivering better health, education, growth, trade, and poverty-reduction outcomes," said Gobind Nankani, the World Bank vice president for the Africa region.
The African Development Indicators for 2006 report does not imply that all of Africa's problems, such as the spread of HIV-AIDS, conflicts in Sudan and Somalia and the persistent lack of basic services, such as water, sanitation, and education have been solved. However, for a continent that is used to hearing pessimistic analysis, the report has decidedly emphasized what has gone right.
"While economic outcomes are increasingly diverse, Africa has made near uniform progress in social outcomes, notably education and health," explained John Page, the World Bank's Chief Economist for the Africa Region.
The encouraging trends include: the drop in number of conflicts in Africa to just five in 2005, from a peak of 16 in 2002; the resolve and effort by several African countries, including Senegal, Mozambique, Burkina Faso, Cameroon, Uganda, and Ghana to cut the number of people living in poverty by half by 2010; and the increase in enrollment in primary schools continentwide to 93 percent in 2004 from 72 percent in 1990, and rise of literacy rates to 65 percent in 2002 from 50 percent in 1997.
Ross Herbert, Director of Governance and APRM Project, South African Institute of International Affairs, reacts to the World Bank report:
Africa's current prosperity - largely the result of global demand for commodities such as natural gas, oil, timber, copper, iron, coal, and cobalt - is a temporary window of opportunity that analysts say should not be wasted.
Africa has to go out into the world and learn markets. Chinese companies went to Ghana and studied kinte cloth, and now you can buy Chinese cloth that emulates kinte that is cheaper than the local cloth.
My point is that Africa has been far more passive than other regions of the world, which have aggressively gone into world markets, committed funds and staff to study those markets, found gaps in trade law, learnt the rules of packaging, the details of sanitary standards and built relationships with retail chains and wholesalers who buy products.
All of that must be done before Africa can open up new export opportunities. In general Africa is not doing it. Where it happens it is the product of individual entrepreneurs or multinationals, who then reap all the profit.
For example, in coffee, Africa is largely a passive price taker. All those who invest in building brands and marketing relationships in coffee-consuming countries reap huge profits while Africa earns pennies. Africa has non-traditional products that it could sell but small African producers don't have the resources to invest in opening new markets.
A degree of government support and collaboration between producers could make a big difference. For example, South Africa's avocado growers banded together and have a marketing arm in Europe. They invested quite a bit to gain access to that market. The government could fund marketing and phyto-sanitary testing facilities.
It took South Africa three years to get past the phyto-sanitary standards needed to sell grapes to Japan. That took determination and state funding in cooperation with producers. It also requires changes to cold storage facilities at ports and at key market hubs. Asian countries have offered such supports to help their firms get into world markets but Africa has not.
Too often we offer the excuse that we don't have money, but it is a question of priorities. If you invest in building a new market, training small farmers and providing them with the means to sell into that market, you will expand your tax base and fiscal options. However, we tend to direct too high a proportion of government spending into consumption and not into these kind of market promoting systems.
Chinese firms come to Africa and actually replicate traditional African cloth and crafts. That is a sign of how aggressive they are. Africa needs to do the same, but we won't be able to do that if we cannot maintain tight control on spending and keep corruption and political patronage out of it. A fund of $1 million can do a lot to open up a market but it can very quickly be wasted if it is used for frivolous travel, fat salaries, big cars, and unneeded offices.
By Josephat Juma
Mr. Juma is an African Executive Writer
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