Only five countries: Angola, Burkina Faso, Chad, Equatorial Guinea and Mozambique in 2003 achieved the 7% growth necessary to reach the Millennium Development Goals (MDGs) of halving poverty by 2015.
According to this year's Economic Report for Africa (ERA 2004) published by UN Economic Commission (ECA) for Africa Mauritius, South Africa, Namibia, and Tunisia emerged as Africa's most competitive nations.
Ghana, which has religiously implemented IMF and World Bank trade liberation and privatisation policies in the last 24 years, is not among the major achievers, raising concerns on the way forward for Ghana's development.
The key message of the report is that trade liberalisation alone will not boost growth and poverty reduction in Africa, a stark indictment of the IMF and the World which see liberation as a the only way poor countries can get out of poverty. The report also comes at the time progressive movements in the United Kingdom are telling the IMF, World Bank and neo liberal governments in the EU to move away from the ideological pursuit of 'liberalisation at any cost' to a more pragmatic approach to trade.
'Poor countries need to be released from free trade dogma and given the flexibility to choose trade policies that will help them promote development', said a Christian Aid report 'Taking Liberties: Poor People, Free Trade and Trade Justice' released last week to coincide with the Labour Party congress.
The ECA report re-echoed Christian Aid's argument that trade liberalization alone will not boost growth and poverty reduction in Africa. The report also warns against protectionist sentiment, particularly in the form of cotton subsidies in the US and other industrial countries. These have damaged prospects for cotton-producing West African countries and further protectionist measures could seriously harm Africa in the medium-term, the report says.
Entitled "Unlocking Africa's Trade Potential", ERA 2004 argues that trade policies in many African countries have been applied haphazardly with too little relevance to overall development objectives.
Data from African countries that have liberalized their economies show that dynamic trade policies, alongside gradual and targeted liberalization, are more effective than wholesale liberalization as in the case of Ghana.
The flagship report uses a competitiveness index developed by ECA that combines the economic and political environment, availability of direct inputs to production and state of infrastructure to provide insights into why development in Africa has fallen behind, compared to other regions.
ERA 2004 analyses the collapse of the Doha talks and argues for a comprehensive approach to development that prioritizes poverty alleviation.It suggests that the successful integration of Africa into the world economy will require better-educated and healthier workforces, improved economic and political governance, and better-quality infrastructure.
Reporting on the continent's overall economic performance, ERA states that in 2003 Africa advanced to real GDP growth of 3.8%, compared to 3.2% in 2002. This encouraging increase reflects Africa's progress in a number of critical areas: the continent has continued to exhibit good macroeconomic fundamentals; fiscal deficits have been kept under control; inflation has largely stabilized; and the region's current account deficit fell.
According to the ERA 2004, the regional outlook for 2004 is positive with growth projected at 4.4%. However, there are several downside risks. The recovery of the global economy is marred by significant international imbalances because of the United States' large current account deficit, and the matching surplus concentrated in a few countries. According to the report, adjustment through sharp depreciation in the US dollar could interrupt the recovery.