By 2035, Cameroon aspires to join the ranks of industrialized, upper-middle-income nations with low poverty rates, strong economic growth, and a functioning democracy. To realize that goal, the government’s strategy (Document de Stratégie pour la Croissance et l’Emploi, DSCE) envisions annual GDP growth rates of 5.5 percent and the creation tens of thousands of formal jobs each year. With a relatively more diversified economy than its more oil-dependent peers in the CEMAC region, the country seemed well-poised to achieve its objectives until at least halfway through the decade. However, Cameroon has been facing a combination of external headwinds and internal constraints that present challenges to its development aspirations, poverty remains high at 37.5 percent (in 2014).
Following the change of political leadership early in 2018, South Africa was gripped by a wave of optimism. Analysts raised their growth forecasts for the year significantly (Figure 1). At the World Bank, we were more cautious, warning in our 11th South Africa Economic Update that South Africa’s growth challenges were deep-seated and structural and would take considerable policy action and time before translating into higher growth. Nevertheless, we too raised our forecast, to 1.4% for the year. Although this made our forecast one of the most pessimistic among South African observers, we were wrong: we were too optimistic! Like other economists, we now expect growth for 2018 to have averaged less than 1%.
For the past few years, I have been fortunate enough to be the World Bank’s resident economist for Mauritius and Seychelles. With this now coming to an end, here are some especially striking impressions of these countries’ successes and challenges that I hope can provide food for thought more widely.
The wealthy can borrow money to finance their investment needs because bankers trust them. Those who are less well off, and who need loans the most, do not have this access and must call upon the solidarity of their family and community to finance their investments. The same logic can be used at the country level. High income countries borrow, while many poor African countries have a limited access to international capital markets. In recent years, only one fourth of sub-Saharan African countries were able to issue international bonds—and do not have any other alternative but to solicit international aid.
Dear Africa Can readers, we’ve heard from many of you since our former Africa Chief Economist Shanta Devarajan left the region for a new Bank position that you want Africa Can to continue highlighting the economic challenges and amazing successes that face the continent. We agree.
Today, we are re-launching Africa Can as a forum for discussing ideas about economic policy reform in Africa as a useful, if not essential, tool in the quest to end poverty in the region.
You’ll continue to hear from many of the same bloggers who you’ve followed over the past five years, and you’ll hear from many new voices – economists working in African countries and abroad engaging in the evidence-based debate that will help shape reform. On occasion, you’ll hear from me, the new Deputy Chief Economist for the World Bank in Africa.
We invite you to continue to share your ideas and challenge ours in pursuit of development that really works to improve the lives of all people throughout Africa.
Here is my first post. I look forward to your comments.
In 1990, poverty incidence (with respect to a poverty line of $1.25) was almost exactly the same in sub-Saharan Africa and in East Asia: about 57%. Twenty years on, East Asia has shed 44 percentage points (to 13%) whereas Africa has only lost 8 points (to 49%). And this is not only about China: poverty has also fallen much faster in South Asia than in Africa.
These differences in performance are partly explained by differences in growth rates during the 1990s, when emerging Asia was already on the move, and Africa was still in the doldrums. But even in the 2000s, when Africa’s GDP growth picked up to 4.6% or thereabouts, and a number of countries in the region were amongst the fastest-growing nations in the world, still poverty fell more slowly in Africa than in other regions. Why is that?
- Central African Republic
- Burkina Faso
- Congo, Democratic Republic of
- Congo, Republic of
- Cote d'Ivoire
- Equatorial Guinea
- Gambia, The
- Sao Tome and Principe
- Sierra Leone
- South Africa
- South Sudan
- africa growth
- East Asia
- cash transfers