31.05.2006 World Economic Forum on Africa 2006 Growth has become Africa's new development strategy, according to panellists at the plenary session. They believe that the high growth rates being experienced by many countries can be sustained through political stability and good macroeconomic policies. However, it is also true that high oil and commodity prices had helped to push up the continent's growth rate to a 30 year high of 5.5% in 2005.
But, many challenges remain. These include the spread of HIV/AIDS, a shortage of skilled labour, high unemployment, a dearth of infrastructure, and the fact that Africa has been identified as the one region that may fail to meet the Millennium Development Goals within the identified time frame.
The capacity to develop the continent is another constraint. Thabo Mbeki, President of South Africa, maintains this is holding back implementation of programmes that have been agreed on and on which there is consensus.
The issue of the effectiveness of aid was debated. William Easterly, Professor, Economics Department, New York University, USA, said the billions of dollars in aid so far has not led to economic growth in Africa despite the international community's belief not only that it has helped the continent, but that doubling it would help it more.
Jakaya M. Kikwete, President of Tanzania, suggested that official direct assistance is crucial for countries with minimal resources, such as Tanzania, and that its management and effective delivery should be questioned, rather than its usefulness for development.
Nigeria's central bank governor suggested that aid has helped Africans to avoid difficult issues such as accepting that many of the continent's states are simply unviable and would crumble without such assistance.
Easterly said growth had to be driven by the private sector, which is where the current dynamism in Africa is taking place, for example in the mobile phone and ICT sectors.
Lars Thunell, Executive Vice President, International Finance Corporation (IFC), Washington DC, emphasized the importance of developing African companies and entrepreneurs, particularly through developing the financial sector, removing bottlenecks to business and reducing bureaucracy.
The three presidents highlighted agriculture as a key area aea for future growth, with manufacturing, infrastructure development and ICT mentioned as also being important.
The issue of Africa's poor branding was raised. President Mbeki said the story the continent should be telling is one of success and the major achievements in a short time of countries such as Mozambique, Tanzania and Botswana, but this is not happening.
Panellists concluded that growth has to come from inside Africa, led by Africans themselves. They need to make the best use of resources and new capital being invested in the continent, which currently outstrips aid flows.
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