UNITED NATIONS, April 3 (UPI) -- There's good news and there's bad news from Africa. The good news is that African economies are generally improving, increasing to a growth level just over 5.5 percent per annum. But a U.N. report says the growth momentum on which the hike is based is very fragile, threatening the hike, already short of the desired 7 percent.
At Tuesday's launch of the "Economic Report on Africa 2007" at U.N. World Headquarters in New York, Ejeviome Eloh Otobo, director of Strategic Planning in the U.N.'s Peacebuilding Support Office, also said several nations had uneven development with some even regressing, such as Zimbabwe, which had a negative growth rate of 4.4 percent, while Comoros, Ivory Coast, the Seychelles and Swaziland had grown by only 1 percent.
Zimbabwe has been suffering inflation of more than 1,000 percent for nearly a year, and Ivory Coast had been throttled by a political crisis.
The 7 percent increase level sought is the figure deemed desirable to achieve progress in reducing poverty, the first of the U.N. Millennium Development Goals. Only eight countries had growth above that rate: Angola, Mauritania, Sudan, Ethiopia, Liberia, Libya, Mozambique and Congo.
Otobo, a former economist with the Economic Commission for Africa, said the report found African economies had grown at a rate of 5.2 percent in 2004, 5.3 percent in 2005 and 5.6 percent in 2006 and are projected to grow at 5.8 percent in 2007.
Growth had been driven mostly by the sudden and significant increases in oil prices and other primary commodities over the past 12 to 18 months. Heavy dependence on primary commodities underscored the underlying fragility of African economies.
He said the report called for new growth policies that would go beyond the traditional focus on the second generation of reform policies pressed on Africa by international financial institutions. The first generation had emphasized macroeconomic stabilization, focusing on fiscal deficits, exchange-rate devaluation, interest-rate liberalization and reduced tariffs, and structural reforms, which stressed privatization and financial sector reform.
The second generation of reforms had focused on institutional and governance issues, such as combating corruption, establishing robust public services and creating mechanisms for sound, efficient, market-friendly regulatory frameworks.
Despite progress made in the previous generation, time had come for Africa to embark on more systematic efforts to diversify its economies, Otobo said. That could only come about through the promotion of more proactive growth policies.
The "old concept" of economic diversification had been "dressed up afresh," having been one of the key economic tasks African leaders had set themselves at independence. However, it had been halted by a combination of debt and additional reforms pressed on the leadership in response to those debt crises, he said.
On the impact of China's rapidly growing investment in Africa, the report said little attention had been paid to China's investment in infrastructure, particularly roads and railways, contrary to the popular view that its interest was only in oil-producing countries.
In Sierra Leone, China was investing in electricity, which was required to provide impetus to the West African country's economic recovery and growth, it said.
Asked whether countries without oil or commodities had experienced uneven development, he said some of them had actually regressed, citing Zimbabwe at minus 4.4 percent.
Otobo said not all African states belonged in the same category, even though they were in the same region. From the peace and development perspective, they could be classified into four categories: countries in conflict; those emerging from conflict, with a distinction between those that had emerged in the past five years and those that had emerged earlier; countries wracked by political tensions, but without conflict; and countries with stable economies buttressed by democratic governance.
Where each country lay in that peace-development spectrum, and the problems they faced internally, would determine the measures they should pursue, he said. Some needed merely to overcome political tensions, while others must come to grips with peacebuilding in a post-conflict environment.
The report put African countries into one of five categories according to a "diversification spectrum" of those doing very well, like Mauritius, Tunisia and South Africa; those that were backsliding, Nigeria being one example; those that had stagnated, such as Kenya; those that had made no progress, including Burkina Faso and Senegal; and "non-starters" like the Democratic Republic of the Congo, still experiencing conflict and Liberia, just out of conflict.
Asked what international or market measures could support domestic efforts, he said the report made the case for directing development financing into infrastructure and related capacity-building, since underdeveloped infrastructure could not support diversification.
