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31.10.2006 General News

World Bank acknowledges Ghana’s improving economy

By GNA
World Bank acknowledges Ghana’s improving economy
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hana is among a dozen African countries shortlisted to meet the Millennium Development Goal target of halving poverty by 2010 after lifting significant percentages of their citizens above the poverty line, according to a World Bank report released in Washington on Monday.

Other African countries that are also showing encouraging results and might be well on course to meet the MDG target include Senegal, Mozambique, Burkina Faso, Cameroon, Uganda and Cape Verde.

“Africa is today a continent on the move, making tangible progress on delivering better health, education, growth, trade and poverty-reduction outcomes,” said Gobind Nankani, the World Bank Vice President for the Africa Region.

The annual World Bank publication, African Development Indicators (ADI) 2006, depicts a diverse continent, with several countries making remarkable progress, some stagnating and others lagging seriously behind.

The full spectrum of achievers and laggards stretches from Zimbabwe, which recorded a negative growth rate of 2.4 percent – the only country with a negative growth rate in 2004 on the continent - to Equatorial Guinea, which recorded a 20.9 percent growth rate.

“While economic outcomes are increasingly diverse, Africa has made near uniform progress in social outcomes, notably education and health,” explained John Page, the World Bank's Chief Economist for the Africa Region, adding that Africa's per capita income is now increasing in tandem with other developing countries.

The ADI 2006 also confirms the facts that 16 African countries have sustained annual GDP growth rates in excess of 4.5 percent since the mid-1990s; inflation on the continent is down to historic lows; most exchange rate distortions have been eliminated; and fiscal deficits are dropping. The continent weathered higher oil prices better than previous shocks and its real GDP grew by 4.3 percent, compared to 5.4 percent in 2004.

The Report says productivity in Africa's best performing firms is on par with competitors in Asia (India and Vietnam), for example. But, while factory floor costs in Africa's best economies compare well with India and China, Africa has overall lost market share in traditional exports although several countries increased exports by more than 10 percent.

The good news includes confirmation that primary enrollment rates have risen significantly across the continent. HIV/AIDS prevalence and child mortality rates have started to fall and the gender gap has started to shrink in several countries, it noted.

“Gross primary enrollment rates as a share of the relevant age group – a standard indicator of investment in the poor – shot up to 93 percent in 2004 from 72 percent in 1990, contributing to a rise in literacy rates from 50 percent in 1997 to 65 percent in 2002,” explained John Page, the World Bank's Chief Economist for the Africa Region.

He regretted that success increasing primary enrollments from 70 percent in 1991 to above 90 percent in 2004 has not been mirrored in secondary and tertiary education.

Despite the tangible progress, ADI 2006 highlights the numerous challenges facing Africa, the lone region of the world where the number of the poor continues to rise.

The continent, which received a mere 1.6 percent of global foreign direct investments totaling some 10.1 billion dollars, is home to six of the 10 countries adjudged to have the most difficult environment for starting a business and efforts by African firms to enter the global marketplace remain hobbled, among others, by inadequate roads, inefficient ports, and power outages.

The ADI 2006 calls for the lifting of burdensome rules of origin through reforms in the U.S. African Growth and Opportunity Act and the EU's Everything But Arms initiative, and also for reforms “behind the border” to promote intra-African trade.

The report also warns that the immense disease burden posed by HIV/AIDS, malaria, and tuberculosis, as well as by corruption, anemic aid, cascading tariffs barring made-in-Africa products from entering global markets and dwindling foreign direct investments pose a threat to gains in overall poverty alleviation.

“Improving governance and smart management of natural resource rents are key requirements for improving development outcomes in Africa, where an estimated windfall of more than US$200 billion in oil revenue alone will accrue to African governments between 2000 and 2010,” said Nankani, reflecting on the fact natural resource-rich economies have tended to make slow progress on the continent despite their enormous wealth endowment.

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