Top UN development official hails sub-Saharan Africa’s economic growth

16 October 2007

The head of the United Nations Development Programme (UNDP) reported today that for the first time in years countries in sub-Saharan Africa are actually growing faster than the global economy, but added that conflict and lack of capacity are two of the main challenges faced by the continent in achieving economic progress and development.

The head of the United Nations Development Programme (UNDP) reported today that for the first time in years countries in sub-Saharan Africa are actually growing faster than the global economy, but added that conflict and lack of capacity are two of the main challenges faced by the continent in achieving economic progress and development.

“When one looks at the numbers, one can actually feel somewhat encouraged in terms of overall economic progress,” UNDP Administrator Kemal Dervis said at a press briefing in New York, having just returned from a two-week trip to Eastern and Southern Africa.

He noted that average GDP growth in 2000-2003 was 3.7 per cent in sub-Saharan Africa, and 5.6 per cent in 2004-2006, which is “perhaps the most rapid growth overall in sub-Saharan Africa that we’ve seen in decades.”

Although the final numbers for this year are not yet ready, growth in the region will probably be around 6 per cent – more than 1 per cent higher than the global average. “For the first time in a very long time sub-Saharan Africa is actually growing faster than the world economy,” he said. “I think that is quite significant.”

He also noted that over the last six years, oil-exporting countries have grown at about one and a half percentage points faster than oil-importing countries. This means that some of the oil-importing countries are growing quite fast, despite the heavy burden placed on them by high oil prices.

Another significant trend is the fact that during the same time frame, the ratio of investment to GDP has grown from 15 to 20 per cent. While that is “very significant” in a region that has “huge” investment needs, Mr. Dervis said it is not sufficient as Africa should probably invest some 25 to 28 per cent of its GDP. “But still, moving from 15 to 20 is quite considerable,” he added.

Responding to concerns that sub-Saharan Africa is currently off track for meeting any of the eight Millennium Development Goals (MDGs) – the ambitious targets the world has set itself for slashing poverty, hunger, disease and illiteracy by 2015 – Mr. Dervis admitted that it will be difficult for most African countries to meet all the Goals by the target date.

However, he stressed that progress has accelerated towards the MDGs, including in relation to primary school enrolment and access to clean water. “Some countries are making quite rapid progress and that progress is now accelerating,” he noted.

Mr. Dervis cited conflict prevention and resolution as the “number one priority” in ensuring successful development in Africa. Those countries that have not yet overcome conflict are still suffering, since the cessation of violence is the “first condition” for progress.

Mr. Dervis praised the leadership in many African government ministries, which he said is characterized by a “new ‘can do,’ results-oriented and pragmatic attitude.” At the same time, he stressed the need to build local and national capacities.

One area in which capacity building is vital is foreign investment, which plays a critical role in Africa in such areas as infrastructure, mining and oil. Mr. Dervis stressed that the capacity to negotiate contracts with foreign investors that are truly beneficial to the country and that share the benefits between the foreign investors and the local economy deserves greater attention.

“In some countries, a good contract can make the difference between a project that will just be an enclave paying very little taxes, bringing very little benefits to the local economy [and] a project that is truly benefiting the local economy,” he stated.

“Sometimes two or three well-negotiated contracts are financially equivalent to maybe the whole of the foreign aid that goes into an African country.”

 

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