Creativity key to attaining millennium goals - ECA

Africa's economic growth is estimated to average 5.8 percent in 2007, but this rate of performance is insufficient to meet the Millennium Development Goals (MDGs) by 2015, according to Léonce Ndikumana, chief macroeconomic analyst at the trade division of the United Nations Economic Commission for Africa (ECA).

"Countries will never be able to achieve the MDGs if they are not creative," Ndikumana told reporters at the end of the two-day Conference of African ministers of finance, planning and economic development in Addis Ababa on Tuesday. "Business as usual just won't do."

The MDGs, which range from halving extreme poverty to halting the spread of HIV/AIDS and providing universal primary education by 2015, are a blueprint agreed to in 2000 by all countries and leading development institutions.

Progress towards achieving the goals has been varied, according to the African Centre for Gender and Social Development. For example, 62 percent of 46 countries saw an improvement in hunger conditions, but in 26 percent of 43 countries, the proportion of the undernourished increased.

Overall net primary school enrolment increased from 53 percent in 1990 to 64 percent in 2004, but in eight of the 31 countries surveyed, more than 50 percent of pupils drop out of primary school before grade five.

The Centre, in a report presented to the Addis Ababa conference, said UNAIDS had reported a decline in HIV/AIDS prevalence rates in some countries, but this was not widespread. It reported high malaria rates and related deaths in West Africa, and an increase in tuberculosis in all regions except northern Africa.

Countries will never be able to achieve the MDGs if they are not creative

Ndikumana said the MDGs were not an impossible objective, but with only four countries averaging real economic growth of 7 percent or more in 1998-2006, few were in a position to realise the MDGs by 2015 without significant policy shifts.

All countries on the continent, he added, were under-utilising their national resources to boost growth and development - not just by diversifying export markets, but also in areas such as taxation. More aid was needed but would only be effective in combination with a country's own efforts at encouraging investment and economic growth, he emphasised.

2007 economic report

The theme of the conference, and the 'Economic Report on Africa 2007' released on Tuesday, was 'Accelerating Africa's Development through Diversification'. Some countries had successfully expanded into new industries - with oil exports, for example.

However, for others there were tariff barriers of up to 25 percent on processed goods that prevented such diversification. Textiles was one such industry where Africa had a comparative advantage, said Hakim Ben Hammouda, director, trade and regional integration division of the ECA, but in this respect the international trading structure was prohibitive.

Other hindrances to diversification included HIV/AIDS, which undermines labour productivity and labour supply, as well as incurring indirect costs to the economy in the form of sick days, home care, etc; and poor infrastructure and unreliable energy supplies at national and regional levels, which are detrimental to trade.

The ECA recommends a three-pronged approach: macroeconomic policies to support diversification; trade policies to deepen diversification; and strengthening institutions to support such efforts. Flexible macroeconomic policies that encouraged investment were crucial, it added.

African economies were still too reliant on primary commodity exports, which made them especially vulnerable to external shocks, such as a global slowdown, but the ECA believed Asian demand for African exports was sufficient to offset any potential decline in western European and American growth this year.

The prospect of another spike in the oil price was good for oil-exporting countries on the continent, and should have only a limited impact on oil-importers, as long as improved economic management and commodity exports were sufficient, said the ECA. In 2006, higher oil prices had a limited impact on countries that did not have oil or minerals to export, thanks to debt relief and higher aid flows, as well as improved agricultural output and prices.

Overall, the best growth performer was North Africa followed by central Africa, while West and southern African growth slowed, and East Africa was on a par with 2005.

mw/jm