'Fast Economic Growth' in Africa

The economic outlook for Africa is improving after a decade of growth of 5.4% for the continent that matches global rates, the World Bank has said.
The trend indicates that a fundamental change is occurring in Africa, a World Bank official told the BBC. But the bank's latest report, Africa Development Indicators 2007 (ADI), says ongoing investment is needed to sustain long-term development on the continent. Otherwise, a split may grow between affluent nations and stagnant ones.

The report looked at more than 1,000 indicators covering economic, human and private-sector development, governance, the environment and aid. It concludes that growth in many African countries appears to be fast and steady enough "to put a dent on the region's high poverty rate and attract global investment". The World Bank's chief economist for Africa, John Page, said he is "broadly optimistic" that there's a fundamental change going on in Africa. "For the first time in about almost 30 years we've seen a large number of African countries that have begun to show sustained economic growth at rates that are similar to those in the rest of the developing world and actually today exceed the rate of growth in most of the advanced economies," he told the BBC. The key, said Mr Page, was that "Africa has learnt to trade more effectively with the rest of the world, to rely more on the private sector, and to avoid the very serious collapses in economic growth that characterized the 1970s, 1980s and even the early 1990s." The report points to wide variations in Africa, however, highlighting three distinct groups of countries: 1. The big oil-exporting countries. 2.Those with expanding, diversified economies. 3. Those which have few natural resources, are conflict-prone and are experiencing slow or no growth.

Uneven growth rates between these groups risks splitting the continent between countries which become affluent and eradicate poverty and those which continue to stagnate. For example, 60.5% of total net foreign direct investment in sub-Saharan Africa in 2005 went to oil exporting countries. South Africa and Nigeria account for more than half of the region's gross domestic product. Poor infrastructure and the high cost of exporting from Africa compared to other regions of the world has been holding the continent back rather than any failures of African enterprise or workers. Volatility in sub-Saharan Africa has dampened investment, the report says. Corruption is also a factor that may limit needed investments in education and health. "Perhaps the easiest illustration of that is in the resource-rich economies where the resources often accrue to a small number of corporations and to government," said Mr Page.
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