Accra, Oct 21, GNA - Professor Ernest Aryeetey, an Economist, on Thursday said African economies needed to immediately identify other sources of financing investment in addition to the traditional domestic and foreign savings.
He said it was unlikely that African countries could find the warranted resources to finance the estimated rise of investment or Gross Domestic Product (GDP) from 19 per cent to 25 contained in the Millennium Development Goal, for which world leaders had agreed that the incidence of poverty in Africa should be halved by 2015.
Professor Aryeetey, who is also the Director of the Institute of Statistical, Economic and Social Research of the University of Ghana, Legon, was delivering an inaugural lecture titled: " Financing Africa's Future Growth and Development" at the Great Hall of the University. He said the slow rate of growth in most countries in Africa was largely as a consequence of various structural characteristics of African economies and their relationships with other economies.
Referring to figures from the United Nations Conference on Trade and Development (UNCTAD) in 2000, Prof Aryeetey said the current annual total capital inflows of 9.5 billion dollars would have to be doubled over the next 10 years in order to raise the investment/GDP ratio to 25 per cent while the savings/GDP ratio went up to 18 per cent to achieve annual growth rate of six per cent.
He, however, stated that more recent estimates suggested that an additional 30 billion dollars would be required for Africa to achieve the MDG's and transform its structures for growth.
Professor Aryeetey said while it was essential to mobilise all domestic resources in order to reduce the resource gap, indications from the structure of African economies showed only long-term feasibility, and hence the urgent need to mobilise external resources in the short and medium term.
The ISSER Director called on African governments to adopt measures to attract the required external resources to close the resource gap. These, according to Prof Aryeetey include an improvement in the generation of financial resources in the long-term by reducing risks associated with rural production, stabilisation of the macro-economic environment to ensure predictable and relatively stable returns on financial assets, and reduction in the transaction cost of holding assets through the development of appropriate micro finance institutions.
African governments are to facilitate the growth of exports in the short-medium term to attract official development assistance, ensure that debt relief enhance growth and attract increasing foreign direct investment and other private capital.