Mzansi Afrika

From Johannesburg South Africa, a window on the world

Wednesday, June 02, 2004

Africa in the news

A round up of some African stories that grabbed my interest today.The BBC reports:

Military officers from the US and Europe are reported to have met to discuss terrorism and the security of oil supplies in Africa. US officials say the meeting is the first in a series designed to provide the main forum for an exchange of security information about Africa. The US has already announced plans to help Africa create five rapid reaction brigades to fight terrorism.

Highlights from two Sapa-Afp reports on the World Economic Forum Meeting on development currently taking place in Maputo:

A report released Wednesday by the World Economic Forum called Africa the worst economic tragedy of the 20th century.The report said in 1970 Africa accounted for one in 10 of the world's poor but by 2000 nearly half the world's poor are African. Economic growth has been so dismal that most sub-Saharan countries are worse off than they were at independence. The report, written by Elsa V. Artadi of Harvard University and Xavier Sala-i-Martin of Columbia University, said Africa's demise is linked to military conflicts, corruption, absence of the rule of law, undisciplined fiscal policies, poor infrastructure and low investment. "There should be no doubt that the worst economic disaster of the 20th century is the dismal growth performance of the African continent," they wrote.

Per capita income in sub-Saharan Africa is US$200 lower now than in 1974, they said. That is a decline of 11 percent over 25 years when the rest of the world averaged an increase of 2 percent a year. "This evolution is extremely worrisome, if we consider that Africa was already extremely poor in 1974," the authors said. The report was part of package surrounding the Forum's Growth Competitiveness Index for Africa that was released Wednesday in Maputo, Mozambique, where the Forum is holding its annual African Economic Summit. The Growth Competitiveness Index measures a country's potential to achieve sustained economic growth.

The Forum, in its summary, said the long awaited renaissance of the African economy has not taken place. It said it is difficult to identify a single group of African economies that have experienced high, sustained per capita income growth. It noted that Mauritius and Botswana seem to be the only countries with high, sustained growth.
It cited the once relatively prosperous Zimbabwe, which ranked 22 in Africa and 97 of 102 worldwide, as an example of what goes wrong, saying it had the worst economic environment in Africa. Part of the problem in Africa, the Forum said is that Africa cannot attract enough investment.

Investment rates in Africa are far below the rest of the world, but some of the reasons are problems that Africa must address. It noted that return on investment in Africa is about a third lower than the rest of the world. Investment in Africa also is a very high risk because of political instability, price volatility, uncertain economic environments and the tendency of governments to engage in sweeping policy reversals.

And Botwana was found to be Africa's top competitive economy, ahead of other powerhouses like South Africa and Nigeria.

The survey places Botswana in 36th place in 102 countries surveyed by the WEF worldwide, it said. At the bottom end of the scale, Chad ranked the lowest, with problems listed as access to financing, the lack of infrastructure and corruption.


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