(For other news from Reuters Africa Summit, click here)
* Policy makers play down QE tapering, China slowdown impact
* Macro-economic metrics still headed in right direction
* But reforms needed to drive transformation, multiply jobs
* Resources can be leveraged, explosive potential seen
By Pascal Fletcher
JOHANNESBURG, April 10 African presidents and
policy makers are pushing back against pessimism to tell the
world their continent's economic boom is real and sustained, but
they say it must work harder to roll back poverty and create
jobs for its restless youth.
From Senegal to Nigeria and Rwanda, officials play down the
impact on investment and capital inflows from the U.S. Fed's
unwinding of its economic stimulus programme, or from signs of
slowdown in China and its appetite for African commodities.
"You know, some people are talking about writing an obituary
for Africa Rising ... and I think it's premature," African
Development Bank (AfDB) President Donald Kaberuka said in a
recent interview, a message repeated during a Reuters Africa
Summit held in several African capitals this week.
Speakers said the drivers of Africa's headline-grabbing
growth in recent years - investment in natural resources,
swelling population, rapid urbanisation, an expanding middle
class and mushrooming consumer demand - were undiminished.
Carlos Lopes, executive secretary of the U.N. Economic
Commission for Africa, said Africa's macro-economic metrics were
still headed firmly upwards, helped by better management by
governments and other trends, such as the continent's ability to
"leapfrog" to advanced communications and energy-use
technologies, leaving older outdated modalities behind.
"All will still go this year in a good direction, less
inflation and bigger reserves," Lopes told Reuters.
His U.N. commission sees Africa's GDP growth, including
still-troubled North Africa, accelerating to 4.7 percent in
2014, from 4 percent in 2013, and rising to 5 percent in 2015.
The World Bank this week forecast Sub-Saharan Africa -
excluding North Africa - would grow at 5.2 percent in 2014,
spurred by record investment inflows and spending and up from
4.7 percent last year.
"There are some signs of pessimism in emerging markets as a
whole, but not really in Africa," said Jean-Michel Severino,
chairman of venture capital firm Investisseurs & Partenaires
which funds small businesses promoting economic and social
development on the continent. Severino ran the French
Development Agency for a decade before joining the firm.
Far from being pessismistic, Africa's leaders are not afraid
to tell investors that if they stay away they will lose out.
"Business opportunities are there, growth is there and the
population is there," Senegal's President Macky Sall said in an
interview on Monday.
"If someone does not see this opportunity, and turns their
back on Africa - well, it won't be Africa that loses."
Lopes, who is from Guinea Bissau, one of Africa's poorest
and most vulnerable states preyed upon by foreign
drug-traffickers and domestic coup-mongers, said the region as a
whole needed to foster a positive vision and build on it.
He told African finance ministers in Abuja on March 29 the
continent was showing a new brand: "one that exudes confidence,
attractiveness for investments, and that has considerably
lowered risk, with investment reaching $50 billion in 2012".
But he acknowledged "Africa still has a branding problem".
The world's mainstream media tended to focus on the latest
conflicts - for example, in Central African Republic, or in
South Sudan - where images of horrific slaughter of civilians
and helpless refugees still coloured views of the continent.
This tended to obscure the 'good news' naratives of more and
more African states, many with wars, genocides and famines in
their recent history, whose increasingly better managed
economies were now surging ahead and attracting investment.
Ethiopia, Ivory Coast, Sierra Leone, Rwanda, Mozambique and
Angola were among these, taking steps to emulate high-performers
like Botswana, Mauritius, Seychelles and Cape Verde.
Nigeria's Finance Minister Ngozi Okonjo-Iweala is another
tireless campaigner against what she calls "an incessant picture
of Africa unable to cope, Africa disaster etc".
Her country, Africa's No. 1 energy producer which was this
month elevated by a GDP rebase to replace South Africa as the
continent's largest economy, faces big security and governance
challenges before an election next year, including oil theft,
corruption and an insurgency waged by Islamist sect Boko Haram.
"We think the Africa Rising story is real but it does have
some vulnerabilities, which we need to look at," she said.
"If this growth isn't firmly anchored on really transforming
sectors that can create jobs, we will have a youth problem on
our hands, we already have it," Okonjo-Iweala told Reuters.
Poverty and lack of economic opportunity are factors seen as
driving young northern Nigerians into Boko Haram, which fuses
radical Muslim revivalism with an anti-government agenda.
The Nigerian finance minister said Nigeria had to grow
faster than its current 7 percent to turn the tide on poverty, a
general message Lopes said held good for Africa as a whole.
He told the Abuja meeting: "We still need to move from 5 to
6 percent average growth to the magic 7 percent. The minimum
required to double average incomes in a decade. There is still a
long way to go as poverty remains high, access to social
services weak and pervasive conflict undermines gains."
LEVERAGING RESOURCES, REFORMS
A new report by AfDB economists says eliminating poverty by
2030 - a World Bank goal set in 2013 - "is out of Sub-Saharan
Africa's reach". It said poor accounted for 47.9 percent of
Africa's population in 2010, still the world's poorest region.
The paper sees a more realistic goal of reducing poverty by
a half to two thirds by 2030 through "policies accelerating
growth and reducing inequalities", especially in high poverty
states like Nigeria and Democratic Republic of Congo.
Economists and policy makers say steps to maximise Africa's
growth potential must seek to throw off the obstacles holding
countries - and the continent - back. This included the region's
huge infrastructure and power deficits - for example, Africa had
only exploited 5 percent of its hydropower potential -
corruption and governance issues, improving access to long-term
financing and also reducing bureaucracy for doing business.
Africa held huge natural resources which governments should
leverage to obtain transforming, job-creating investments.
The U.N.'s Lopes cited data showing the continent had 12
percent of the world's oil reserves, 40 percent of its gold, 80
to 90 percent of its chromium and platinum, 70 percent of
coltan, 60 percent of its unused arable land, 17 percent of the
world's forests, and 53 percent of the world's cocoa.
"Africa needs to fully use its bargaining position by
maximising the demands for value addition in the commodities
where it has a dominant position," Lopes said.
Douglas Munatsi, CEO of southern African lender BancABC,
said the case of Nigeria alone showed the continent was just
"scratching the surface" in terms of its economic potential.
"I reckon 10-20 years of good governance in Africa, no
natural disasters, commodity prices remain stable, I think this
thing will explode. It is going to be bigger than people
realise," he said.
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(Additional reporting by Daniel Flynn and Diadie Ba in Dakar,
Helen Nyambura-Mwaura and Sureka Asbury in Johannesburg, Editing
by Angus MacSwan)