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Boosting economic growth in sub- Saharan Africa is dependent to a large extent on expanding infrastructure investments, improving the investment climate, harnessing skills for innovation and building institutional capacity across the continent, a latest report by the World Bank has said.
World Bank Vice President for the African region Gobind Nankani, said in a statement obtained by Zambia News and Information Services yesterday that Africa is on the move and has reached a point of breaking out of the long economic stagnation of the 1970's and 1980's.
Nankani said the last 10 years have seen renewed growth and improved governance across a number of African states, setting the stage for taking advantage of opportunities that are emerging from a rapidly changing world economy.
He said, however, Africa's erratic growth performance, particularly when compared to other developing regions, has been identified as the single most important reason behind its lagging position in eradicating poverty.
The World Bank study pointed out that two primary factors accounting for Africa's slow growth over the lost decades are a relatively low rate of capital accumulation and a low growth rate of productivity for the investments that are made in the region compared to productivity in other developing regions.
Benno Ndulu, the author of the study, urged African countries to create right conditions to benefit from opportunities offered by the growing global economy and by information-based technology.
Key among these conditions is the need to lower indirect costs that seriously constrain export-led growth, invest in skills and support innovation to spur productivity and competitiveness, he said.
"In Africa, the costs of contract enforcement difficulties, inadequate infrastructure, crime, corruption and regulation can amount to over 25 percent of sales or more than three times what firms typically pay in taxes," Ndulu explained.
The study also notes that inequalities have a major influence on the efficacy of growth in reducing poverty.It said there is a need to pay greater attention to this dimension of poverty reduction to complement the impact of accelerating growth, particularly by enhancing the income-earning opportunities for the poor more than for other income-earning segments, or by enabling their greater participation in the growth process.
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