Sub-Saharan Africa has been growing steadily over the past few years, but needs to push up its growth rate to 10%, African Development Bank (AfDB) president Donald Kaberuka says.
He told a recent seminar at the University of Cape Town (UCT) that several African countries had doubled their gross domestic product (GDP) growth rates over the past few years, but that there was potential to do more.
This year, sub-Saharan Africa is to set to grow at 6.6%. If it were not for South Africa’s sluggish growth rate, sub-Saharan Africa would have grown at 7.4%.
Kaberuka told the seminar, jointly hosted by UCT’s Graduate School of Development Policy and Practice and the South African Institute of International Affairs, that developed countries had been surprised by the economic resilience shown by the continent during the recent global financial crisis.
“Over time, Africa has changed dramatic-ally. I do believe the AfDB has contributed to the current momentum. “Some countries have doubled their eco- nomic growth. But we need 10% growth to get to where we want to be because we’re coming off a very low base.”
He said Africans had proved that they could manage their economies well with well-regulated banks.
“We have brought debt levels down to 12% of GDP in Africa. Many countries have come down from 100%. We’re now saying: ‘Go to the capital markets. But don’t build up your debt again’.”
Kaberuka challenged the students, most of them from UCT’s Graduate School of Development Policy and Practice, to be part of a drive to change the nature of economies in Africa and to stand up for clean and accountable leadership.
“We need to expand the base by changing the structure of production. We need to go from economic growth to economic trans- formation.”
He said that, while the mining and gas industries were growing rapidly, and the retail industry in countries like Nigeria was surging as a result of urbanisation, this was not sustainable.
While sub-Saharan Africa had more mobile phones than the US and Europe combined, African countries were not producing compon- ents for mobile phones. These were coming from countries like China, Vietnam and India.
“Instead of merely buying iPhones, we need to help to make the components. Instead of exporting cotton, we must make the yarn and cloth.”
He warned, however, that growth needed to be economically and environmentally sustainable.
He said the Equatorial Belt – countries like Cameroon, Congo and the Democratic Republic of Congo – was in great danger, as its biodiversity was being lost.
“Over 1 000 elephants a month are being killed because of the trade in ivory.”
Kaberuka said the AfDB invested in countries where good governance was key, and where governments were clean, accountable to the people and offered good services.
“If an administration answers those three issues, the rest is risk management.”
The AfDB has 35 offices across Africa and plans to open its thirty-sixth office in Moga- dishu, Somalia.