Global Policy Forum

By Kevin J. Kelley

Ordinary Africans can expect only slight improvements in their living standards in the coming years, the World Bank says in its latest economic forecast for the developing world. The global economy may now be at a cyclical peak, but sub-Saharan nations have gained comparatively little from the long-running expansion, the bank finds. It says that inadequate infrastructure, combined with protectionist barriers erected by rich countries, have prevented most of Africa from sharing in the bounty generated by a record-high volume of world trade.

Global trade is expected to increase 12.5 per cent this year - the highest growth rate since the late 1960s. Africa, however, remains on the margins of the international trading system, and it will be largely excluded from the opportunities offered by electronic commerce, according to the World Bank's analysis. The gap separating the sub-Saharan region from other parts of the developing world is steadily widening as well. The new report estimates that economic growth will reach 5.3 per cent this year in the developing world as a whole, while Africa will attain only half that rate. Nor is the current trend encouraging.

Prospects are not entirely bleak, however. "At least, the worst is now likely over" for Africa, the World Bank suggests. "The forecast is for a halt to the region's lengthy decline and marginalisation and even for a modest reversal." Uganda and a few former French colonies have already achieved relatively high rates of economic expansion due to their "better policy environments," the bank says. Sub-Saharan countries should be able to sustain average annual economic growth rates of about 3.7 per cent from 2003-2010, the report says. Africans' per capita income could increase 1.5 per cent a year during that period - a substantially greater rate than the negligible 0.2 per cent rise in income measured in the current year.

"Unfortunately," the bank adds, "there seems very little prospect of achieving widespread per capita growth rates on the order of 4 or 5 per cent or more, which have characterised East Asia's best performers." The report attributes Africa's lagging performance to a variety of factors that are said to be hindering development. "Economies in sub-Saharan Africa will continue to confront the severe problems of poor transportation and communications infrastructures, a lack of investor confidence that encourages capital flight and constrains private investment, and continued low levels of official assistance," the World Bank observes. Rich countries are also assigned a portion of the blame for Africa's persisting poverty.

"The severe impact of protectionist barriers" is one reason why economic globalisation has so far bypassed Africa, says World Bank official Uri Dadush, commenting on the new findings. The high import duties levied by industrialised nations are seen as particularly damaging to African agricultural exports such as cut flowers from Kenya. Africans should likewise expect only continued decreases in the amounts of aid provided by donor countries, the World Bank warns. Apart from the Bank's own debt-relief initiative, which has begun to benefit Tanzania and Uganda, the sub- Saharan region will experience a further decline in foreign assistance, the report predicts. Lack of access to the Internet will meanwhile prevent African craft industries from realising profits that could be gained through electronic sales to customers in North America and Europe, the report says. While a growing number of businesses in sub-Saharan countries may link to the Internet in the coming years, their competitiveness in the realm of e-commerce will be impaired by a shortage of technical expertise.

One marker for the unalleviated poverty facing many Africans can be found in a table in the report comparing numbers of people subsisting on less than one dollar a day. In 1998, nearly half of the sub-Saharan region's population (302 million people) lived at that extremely low income level. Their ranks had expanded from 217 million a decade earlier. And under a best-case scenario for the year 2015, the World Bank estimates that 360 million Africans (40 per cent of the total) will still be struggling to survive on less than a dollar a day.

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