Business, Economics and Jobs

Africa's economic growth needs equitable distribution


Former UN Secretary General Kofi Annan, right, and the President of the Chinese Investment Corporation, Gao Xiqing at the World Economic Forum in Addis Ababa, on May 10, 2012. Eight African leaders and former British prime minister Gordon Brown are among the more than 700 participants expected at the three-day Addis Ababa meeting. The conference will focus on boosting public-private investment and fostering economic diversity to boost development across Africa.


Jenny Vaughan

NAIROBI, Kenya — The 10-member Africa Progress Panel, a group set up in 2008, has published its latest annual report warning that the continent's economic gains are threatened by growing inequality.

Africa weathered the economic storms of recent years better than other regions and is growing at over 5 percent according to the International Monetary Fund. But speaking at the launch of the Africa Progress Report 2012 at the World Economic Forum Africa in Addis Ababa, Ethiopia, former UN Secretary-General Kofi Annan said: "The strong
economic growth in Africa is at risk due to rising inequality marginalizing large sections of our society."

In the introduction to the report, titled "Jobs, Justice and Equity", Annan writes:

"It cannot be said often enough, that overall progress remains too slow and too uneven; that too many Africans remain caught in downward spirals of poverty, insecurity and marginalization; that too few people benefit from the continent’s growth trend and rising geo-strategic importance; that too much of Africa’s enormous resource wealth remains in the hands of narrow elites and, increasingly, foreign investors without being turned into tangible benefits for its people. When assessing nations, we tend to focus too much on political stability and economic growth at the expense of social development, rule of law and respect for human rights.

"We ... are convinced that the time has come to rethink Africa’s development path. Not all inequalities are unjust, but the levels of inequality across much of Africa are unjustified and profoundly unfair."

This is a truth apparent to even the most casual and blinkered visitor to the continent, let alone those who live here.

The report also made an important step toward tempering some of the more breathless reports on the continent's growing middle class: "While rapid growth is creating an emerging middle class, only 4 percent of Africans have an income in excess of $10 a day. Almost half of all Africans, 386 million people, still live below the $1.25 a day poverty line. Another 30 percent — 246 million people — live in the poverty grey area, on between $1.25 and $2.50 a day." 

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But it adds, "Nevertheless Africa has begun to turn a corner in terms of poverty."

Summarizing the report Annan said, "The overall message of this year’s report is positive. Africa is on its way to becoming a preferred investment destination, a potential pole of global growth, and a place of immense innovation and creativity.

"But there is also a long way to go — and Africa’s governments must as a matter of urgency turn their attention to those who are being left behind."

The panel is chaired by Annan and includes anti-poverty campaigner Bob Geldof, microfinance pioneer Muhammad Yunus, former Nigeria president Olusegun Obasanjo and Graca Machel, women's and children's rights advocate and wife of Nelson Mandela.

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