By Shaoxinlian and Bosun Awoniyi
LAGOS – “Our current projections are for sub-Saharan Africa to grow by an average of 5 percent this year and going up to 6 percent next year…So what we would see is the return of the region to the very high levels of growth before the global crisis,” said Antoinette Sayeh, director of Africa Department of the International Monetary Fund (IMF), in a recent exclusive interview with Xinhua.
In some people’s eyes, Africa is the synonym of poverty, illness and hunger. The truth is it has kept an average growing path of 5 percent in recent years even when the whole world is shrouded in the shadow of the global economic crisis. The Economist magazine ‘s October 2011 edition has pointed out that among the world’s top 10 economies with the fastest growing pace, six were in Africa. And the latest Economic Outlook report released by the IMF in Lagos, Nigeria’s economic hub on Thursday last week also projected that economic activity in sub-Saharan Africa would remain robust at about 5 percent in 2013 and 6.2 percent in 2014. Actually, sub-Saharan Africa has been growing robustly for the last 20 years with a relatively high rate of growth and it also demonstrates resilience toward the global financial and economic crisis in 2008 and 2009, said Sayeh. “Of course at that time, sub-Saharan Africa, being part of the global economy, also had a downturn, and significantly reduced growth in 2009, but has rebounded quite robustly and our current projections are for sub-Saharan Africa to grow by an average of 5 percent this year and going up to 6 percent next year.”
“So what we would see then is the return of the region to the very high levels of growth before the global crisis,” said Sayeh. That is undoubtedly a significant achievement for a continent that decades before had experienced quite a bit of turbulence and low growth and had not done very well in the task of reducing poverty, she said. And how to continue that growth performance in an uncertain world has become one of the challenges sub-Saharan Africa is facing now. She warned that there is still global uncertainty that may mitigate or reduce some growth if “countries don’t respond appropriately.” However, she said that probably the biggest challenge for most African countries now is how to translate that growth into improvement in people’s lives more forcefully than has been the case in the past. She further believes that although many countries have made some progress in that regard the “rate of poverty could be reduced quicker.” She also believes that “inequality in growth could be averted by policy actions that government can take both on macro and structural facts.” According to Sayeh although Africa has shown amazing resilience when facing the global economic crisis, it is “not totally immune to those impacts.”
“When we talk about Africa, in my case, we are talking about 45 countries that we look at when we do our regional analysis in sub-Saharan Africa. They are 45 different countries. So we are speaking in averages when talking about African resilience and its performances and vulnerabilities,” she said. Some of the sub-Saharan countries were more vulnerable to that crisis, especially the middle income countries such as South Africa; those more fully integrated in the global economy and international financial market, said Sayeh, adding that these countries have witnessed a shaper reduction in their growth rates. “A country like South Africa, for example, is still very much trying to recover from some of that. It is not growing as robustly as the rest of the continent.” She said one of the things helping Africa to be resilient when facing crisis is “the progress in diversifying its trade relationships toward the emerging markets.”
“China has become, for example, the simple most important trading partner for sub-Saharan Africa and that has helped through the last few years, when countries were able to continue to have robust markets for their exports. That was not Europe.” However, since many countries in sub-Saharan Africa very much benefit from commodity exports, decreases projected in emerging markets and the impact that that could have on commodity prices would significantly affect a number of Africa countries, she said. “So we don’t want to give the sense that Africa is immune from global developments, to the contrary Africa is very much influenced by what happens increasingly in the emerging markets and the global economy as a whole.” Her advice for those countries is “to use the opportunity they have now to continue to rebuild the policy buffers that they used in responding to the last crisis to replenish those ones. So that if things go differently than our baseline scenario, they have the opportunity to mitigate the impact on the global economy.” Sayeh said Africa has shown significant potential on top of its natural resources, which is the traditional attraction of the continent, especially sub-Saharan Africa. “This is a set of economies with a growing middle class, as well as the potential of growing consumer numbers as markets expand in that regard. This is a region that also had a significant demographic dividend, that can also be major contributor to growth if managed properly.” She said there are opportunities for sub-Saharan Africa to become economically diversified. “Also as more advanced emerging economies become less competitive labour-wise, sub-Saharan Africa can certainly do more to do low-wage manufacturing and other areas that can transform economies. However, on structural transformation she said, “sub-Sahara does not necessarily have to follow the exact paths that people have seen, for an example, in Asia, where there was a significant improvement in the movement of labour from agricultural productivity to the manufacturing sector.”
She said for Africa, there is still much to be done to increase agricultural productivity. “One can conceive of a sub-Saharan Africa translating itself by becoming perhaps more competitive in services.”
“There are different possible paths for different countries in Africa, but you need to learn significantly from other countries’ experiences, countries like China in particular that made structural transformation now a major global issue,” she said. Sayeh has praised the role China is playing in helping Africa. “China, now being the single most important partner for sub-Saharan Africa, has a huge role to play in terms of demand for sub-Sahara exports. It has also significantly expanded its investment in Africa, as well as its economic assistance. In addition, China is a developing country that has made tremendous progress in reducing poverty over the years and in developing its economy and many African countries can take lessons from China’s experience,” she said. “They really should use the resources being made available through Chinese investment in a way that will add to better performance of sub-Saharan African economies,” Sayeh added. – Nampa/Xinhua