Middle-income Africa in sight — economist
THE day when Africa becomes a middle-income continent — at least by the World Bank’s yardstick — could be in sight if growth trends continue and the global economy stabilises.
“We can look to the continent being middle-income,” Shantayanan Devarajan, the World Bank’s chief Africa economist, said yesterday.
The economies of sub-Saharan Africa’s 48 countries are expected to grow by an average of 4.8% this year, the World Bank said in a report yesterday, slightly down from last year’s 4.9%. Officially, 22 states with a combined population of 400-million have now achieved middle-income status, meaning per capita annual income in excess of $1,000.
If the economic growth trend of the past decade is sustained, another 10 will reach the target by 2025, Mr Devarajan said in a video conference broadcast from Washington to African capitals.
Seven more will join the list if they average 7% growth in the coming years.
The biannual World Bank report, called Africa’s Pulse, analyses key economic and social developments. The last one forecast average growth for this year of 5.2% but trimmed the estimate because of slowing global economic activity.
The projected average was brought down by SA, the continent’s biggest economy and its most sophisticated. Excluding SA, this year’s African growth was forecast to rise by 6%.
The continent’s mineral resources have powered the past
Officially, 22 states with a combined population of 400-million have now achieved middle-income status
10 years of expansion, much of it driven by booming exports of raw materials to China.
This year’s fastest-growing economy is Sierra Leone’s, which is heading for a 25% rise in gross domestic product compared with last year. The reason is a huge jump in iron-ore exports from a West African country that was devastated by civil war in the 1990s and held up as a basket case. Second is Niger because of uranium and oil exports.
Earning revenue from mineral resources is one thing, sharing it with the populace and the national treasury has proved much harder for many African presidents and their governments.
“People don’t feel this growth. As a taxi driver once said to me — I cannot eat growth,” Mr Devarajan said.
The World Bank report referred to the central African state of Gabon, whose oil and timber wealth allied to a small population account for a per capita income of more than $10,000. Yet it has the lowest child immunisation rates on the continent, according to the World Bank.
Asked whether $1,000 per capita should qualify a country as “middle income”, Mr Devarajan said: “Even if you earn more than that, it doesn’t mean you won’t have a huge poverty problem.”