Inclusive growth in Africa

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Inclusive growth in Africa by Professor Mthuli Ncube

Inclusive growth in Africa by Professor Mthuli Ncube

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  • 1. INCLUSIVE GROWTH IN AFRICA<br />Africa entered the millennium with an impressive record of economic growth. Prior to the global financial and economic crisis, GDP grew on average at 5.7% per annum during 2001-2008. In 2009, growth decelerated to 2.5% as African economies were impacted by reduced demand for their exports, and lower investment and aid flows to the continent. However, cautious macroeconomic policies, increased trade and investment with emerging countries, and intensified regional integration enabled African countries to weather the impacts of the global crisis and recover with a GDP growth rate of 4.5% in 2010 and forecast at 5.2% in 2011. <br />This positive outlook notwithstanding, a major weakness is that growth is not perceived as being inclusive for all groups of African population. Inequality in terms of access to education and health services; limited job opportunities, especially for the youth; and weak institutional, regulatory and business frameworks still remain pervasive problems despite African countries’ efforts at reforming and restructuring their economies. High rates of poverty and low human development indicators are yet to be reversed. <br />Unless economic growth in Africa is shared and inclusive, the significant achievements featured above will not translate into economic development and poverty reduction. To accelerate growth and reinforce Africa’s capacity to ensure equal opportunities and benefits for all actors of the society, it is critical to address the main barriers to inclusive growth. The lack of effectiveness and accountability of government and its related institutions; lack of economic diversification; lack of economic integration, which is essential for building economies of scale and increasing Africa’s competitiveness; and lack of an enabling environment for private sector development are constraints to growth yielding benefits and equal opportunity for all in Africa. <br />The African Development Bank (AfDB or “the Bank”) has been supporting African countries tackle poverty and create the conditions for growth to be sustained and inclusive. The Bank’s current initiatives towards agricultural development, regional integration, human development, good governance and climate change in Africa are being accompanied by a renewed and more focus approach to inclusive growth, as reflected in a new Long-Term Strategy for the Bank (expected in the next 12 months). Economic and political governance; infrastructure development; financial inclusion; vibrant, dynamic and competitive private sector; higher education, science and technology; economic and social inclusion; and clean energy are new areas of engagement for the Bank in promoting inclusive growth in Africa. <br />Prof Mthuli Ncube, Vice President & Chief Economist – African Development Bank<br />