Global Policy Forum

By Charlotte Denny

The World Bank has seen the dawn in Africa before so some scepticism greeted its claim in a recent report that the continent is poised to inherit the 21st century. After several months in which floods, famine, war and Robert Mugabe's deadly struggle to hold on to power have kept Africa in the headlines for all the wrong reasons, the continent seems to be entering the new century in as bad a state as it spent most of the last.

Some commentators accuse the bank of being far too much of a Pollyanna about Africa. It has an agenda: having spent $60bn in aid in the region over the past two decades, it has to justify its investment. But as a cheerleader for the continent, the bank has a lonely task. Most of the western media has used the recent run of disasters as an excuse to resurrect the old argument that Africa is somehow uniquely doomed.

Thus the Economist recently suggested that the brief growth renaissance of the 90s in a few African countries was based on "good rains and bad accounting". In other papers writers argued that the west should either abandon the continent completely or move in and recolonise it.

As always, the bad news stories crowd out the good. Botswana is the fastest growing country in the world. Tanzania has been at peace since independence apart from a brief excursion into neighbouring Uganda to kick out Idi Amin, and it is starting to get its economy sorted out. Senegal, one of the few African countries to face up to the challenge of Aids, has succeeded in keeping its infection rates at just 1.8%. And Mozambique, even after the floods, is expected to grow at around 6% this year.

But while the gloom is overdone, the size of the challenge should not be underestimated. Africans today are poorer on average than they were 40 years ago. The region's total output is not much more than Belgium's even though its population is 60 times greater. It has one of the most unequal distributions of income, wealth and access to essential services in the world. Excluding South Africa, the continent has fewer roads than Poland.

The World Bank says that taking account of its expected population growth, sub-Saharan Africa will have to grow by 5% a year just to prevent the number of poor people rising. To reach the more ambitious goal of halving the number of people living in extreme poverty by 2015 - the international development goals agreed five years ago, growth will need to exceed 7% a year. To put that target in perspective, remember that last year growth in Africa averaged 2.5%. Even in the good years between 1994 and 1998, growth peaked at 4.3%.

The scale of the challenge is huge. But as Professor John Toye, head of the centre for the study of African economies at Oxford University has said, enough has been learnt over the past 20 years to make the solutions clearer. So what does Africa need?

1. Conflict resolution: the World Bank puts this at the top of its list. Wars are raging throughout the continent, diverting money into armaments which should be spent on development.

2. Debt relief: the west must deliver on its promise of generous and speedy debt relief. Since the Group of Seven leaders met in Cologne last June, only four countries have received any extra debt relief and the amount of loans written down have been trivial.

3. A stable world economy: Africa, perhaps more than any other region, is dependent on stability. When world economy grows too fast, interest rates rise, pushing up the cost to these countries of servicing their debts. The other side of the coin - a global slump - is equally damaging because it causes a crash in the demand for the commodities which Africa depends on for its export earnings.

4. A good WTO deal: the World Bank estimates that its declining share of world trade has cost Africa $68bn a year between 1970 and 1993. Western governments still ringfence their agriculture and textiles sectors from competition, the two most important markets for developing countries. European subsidies for farming cost $300bn annually, equivalent to the entire annual output of sub-Saharan Africa.

5. A global education compact to match the debt plan: investment in human capital is vital, as the rapid growth of east Asia shows. Yet western governments meeting in Dakar earlier this year, backed away from endorsing a global plan which would have set aside $4bn a year for education - equivalent to four days worth of worldwide military spending.

6. Stable politics: Good governance is vital, according to the bank. It says states need to be strengthened, a huge challenge given that in many countries the state is practically non-existent.

7. Stable aid budgets: western governments have slashed aid budgets since the end of the cold war. Africa is still capital starved and depends on donors to meet its financing gap.

Professor Toye says he is personally optimistic about Africa, even though there will undoubtedly be more disaster stories in the future. "That's only part of the whole picture. We are beginning to understand what causes the disasters and I think that knowledge can be put to use. Africans and those who observe the region are capable of learning from past mistakes and successes."

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