African economic growth still inadequate for poverty reduction, says ADB

African economies grew by 3.7 percent on average last year, far below economic expansion rates needed to enable the continent to meet the UN's aim of halving the number of people living in poverty by 2015, the African Development Bank (ADB) said on Tuesday. "The Bank estimates that Africa's GDP [Gross Domestic Product] in 2003 grew by 3.7 percent. This is well above the 2.8 percent recorded in 2002 and higher than the average of 3.1 percent recorded for the previous five years," Omar Kabbaj, the ADB president said at the annual meeting of the bank. "[But] Half the population is still living below the poverty line," he added. Growth was registered partly because some conflicts that ravaged African countries for years had ended. This year, African economies were projected to grow by 4.3 percent on average due to an anticipated recovery in the global economy, higher primary commodity export prices and moderate oil prices, according to ADB. Kabbaj, however, said that despite the higher growth rates, the continent faced considerable challenges, and only countries in North and South Africa were likely to achieve their development goals by 2015. The Millennium Development Goals to be achieved by 2015 were adopted by the UN in 2000. They consist of eight goals and 17 sub-goals covering topics such as education, child health, disease, gender equity, environmental sustainability, and international economic relations. Given what looked like Africa's economic upswing, 18 countries recorded growth rates of 5 percent and above last year compared to 10 countries the previous year, Kabbaj said, adding that Mozambique's economy had expanded by 7 percent. Kabbaj, who was addressing the ADB's annual meeting in the Ugandan capital, Kampala, said both internal and external factors had helped the continent record this improved performance with governments implementing "sound macroeconomic policies" and "structural reforms". "Externally, despite the sluggish performance of the world economy in 2003, Africa enjoyed a more favourable environment where the demand for Africa's exports increased, along with a rise in the prices of most primary commodities," Kabbaj noted. African export volumes increased by about 5 percent, and by 17 percent in value in 2003, the ADB said. The US African Growth and Opportunity Act under which goods from eligible sub-Saharan African countries are allowed into the US market under a preferential tariffs arrangement and a similar scheme offered by the EU, were partly credited for the rise in export volumes. On the sidelines of the meeting, the Bank and Chad signed a grant agreement for US $3.5 million to improve the country's education system.