Elsabe Loots, Ph.D, School of Business and Economics, Monash South Africa, 144 Peter Road, Ruimsig, 1725, South Africa
The growth and development experience of the African continent over the past 25 to 30 years has generally been seen as dismal and disappointing. The relevant data on participation in the world economy substantiates the general viewpoint that the continent has been severely marginalized within the world economy. The dismal economic history of the world’s second-largest continent has also been plagued by political instability, famine, disease and poverty. In 1970 ten percent of the world’s poor were in Africa, and by 2000 this figure had risen alarmingly to 50%. This is further exacerbated by the poor performance on the stated United Nations Millenium Development Goals, to be reached in 2015. This not only sounds like doom and gloom, but also raises a number of questions. The questions posed are: Is it all that bad? Is the continent losing ground in the global economy or is there light at the end of the tunnel? Can the continent reverse its long-term declining growth and development path and is a sustainable “take-off” conceivable? Can the continent emerge from its marginalization, converge with the rest of the developing and developed world and claim its rightful position in the twenty-first century?
For the purpose of this paper the two most pronounced factors in the growth and development process – namely, the political will to transform and the growth process itself – will be addressed.
The data used in the analysis are based on data sources of the World Bank’s Global Development Indicators and African Development Indicators, as well as data obtained from the United Nations Development Program. The analysis is primarily descriptive and qualitative in nature, supplemented with trends analysis where needed.
The paper concludes that Africa remains a continent of contrasts. While some countries are taking significant growth and development strides, others are failing to develop. A number of positive events include: A broad-based endorsement towards change and restructuring through Nepad and the APRM; the decline in conflicts and trends towards more democratic elections substantiates the political will to change; the reversal of the two-decade long declining growth trend towards a positive and more sustainable growth trend since 1995; the fact that the growth experience is more inclusive and broader based; progress on a number of macroeconomic stability factors are supportive of the underlying growth performance, and lastly, the general trend towards human development convergence with the rest of the developed and developing world.
However, a number of factors still need to be attended to, including: the fact that the best performers on the continent are post-conflict societies, emphasizing the vulnerability and fragility of the growth process; investment and saving levels remain low; the real per capita income acceleration is too slow to allow per capita convergence with the non-African developing world as a whole, and lastly, the improvement in institutional quality is too slow and could hamper future sustainability.