Archive for the ‘Africa’ Category
Tuesday, April 20th, 2010
I have just read an interesting blog by Wolfgang Fengler on one of the World Bank’s websites. He notes the fact that Africa’s population is rising rapidly and will soon pass the one billion mark. In fact the UN’s projections expect this to rise to 1.7 billion by 2050, although this is based on declining fertility, and Fengler believes that population could even reach 2 billion.
By 2050 Africa will contain over 20% of the total world population, given the current rate of expansion. Normally we would regard this as a major problem, although Fengler puts forward three reasons why this may not be true, and draws some of his conclusions from examples in Kenya.
Firstly, he argues that there is plenty of room for expansion in Africa. For example, there are on average 170 people per square km living in Europe but only 70 per sq km in sub-Saharan Africa at the present moment.
 This photo was taken on a previous visit to Kahama, Tanzania. But can rapid population growth actually stimulate economic growth? Secondly, he makes the point that previous population growth has been driven by increasing numbers of young children. However, future population growth will be driven by improved life expectancy and also the fact that although there is a wider base of young adults at the moment, the number of children per family is declining. In fact in Kenya the number of children per family was 8.1 in 1978 and this has fallen to 4.6 in 2008 and is expected to reach 2.4 in 2050. The number of adults is expected to triple from 21 million to about 60 million by 2050.
Finally, he argues that population growth and urbanisation go together, with economic growth being closely linked to urbanisation. He says that no country has ever reached high income levels with low urbanisation, and the move to the cities allows for increased innovation and economies of scale. He cites the fact that companies in Kenya even now are targeting the ‘bottom of the pyramid’ where there is growth in the lower and lower-middle income groups.
To read the full article click here.
Tags: Africa, economic growth, life expectancy, macroeconomics, Population, urbanisation
Posted in Africa, Development, Population, economic growth | No Comments »
Tuesday, March 16th, 2010
Aid to developing countries in 2010 will reach record levels in dollar terms after increasing by 35 per cent since 2004. But it will still be less than the world’s major aid donors promised five years ago at the Gleneagles and Millennium and five additional summits. Though a majority of countries will meet their commitments, the underperformance of several large donors means there will be a significant shortfall, according to a new OECD review.
Africa, in particular, is likely to get only about $12 billion of the $25 billion increase envisaged at Gleneagles, due in large part to the underperformance of some European donors who give large shares of official development assistance (ODA) to Africa.
 Africa is only likely to get half the aid promised at Gleneagles. In 2005, the 15 countries that are members both of the European Union and of the OECD Development Assistance Committee (DAC) committed to reach a minimum ODA country target in 2010 of 0.51% of their Gross National Income. Some will surpass that goal: Sweden, with the world’s highest ODA as a percentage of its GNI at 1.03%, is followed by Luxembourg (1%), Denmark (0.83%), the Netherlands (0.8%), Belgium (0.7%), the United Kingdom (0.56%), Finland (0.55%), Ireland (0.52%) and Spain (0.51%).
But others will fall short: France (0.46%), Germany (0.40%), Austria (0.37%), Portugal (0.34%), Greece (0.21%), and Italy (0.20%).
Other DAC countries made varying ODA commitments for 2010, and most, but not all, will fulfil them. Overall, these figures result in additional aid of $27 billion from 2004 to 2010, but a $21 billion shortfall between what donors promised in 2005 and the OECD estimates for the 2010 outcome. Of this shortfall, $17 billion is the result of lower-than-promised giving by the donors and $4 billion is the result of lower-than-expected GNI because of the economic crisis.
All these figures are estimates based on countries’ national 2010 aid budget plans where available and on early GNI estimates.
Eckhard Deutscher, Chair of the DAC, noted that: “Aid has increased strongly as 16 donors have honoured their commitments. But underperformance by the others, notably Austria, France, Germany, Greece, Italy, Japan, and Portugal, means overall aid will still fall considerably short of what was promised. These commitments were made and confirmed repeatedly by heads of governments and it is essential that they be met to the full extent.”
Commenting on the figures, OECD Secretary-General Angel Gurría said: “It is reassuring that most donors are recognising their international responsibilities. As we head into new rounds of discussions about funding climate change and food security concerns, I encourage all donors to carry through on their development promises.”
Tags: Africa, EU, Gross National Income, OECD, Overseas Aid
Posted in Africa, European Union, Gross National Income, International, OECD, aid | No Comments »
Thursday, July 2nd, 2009
Developing countries have not been immune from the global recession or the fragile nature of financial markets. In fact, net private capital inflows to developing countries fell to $707 billion in 2008, which was a severe drop from the peak figure of $1.2 trillion in 2007. It is projected that international capital flows will fall further in 2009 to $363 billion. It would appear that acquiring assets in developing countries is seen as higher risk and low priority at the moment by western economies. This is in contrast to the increase in FDI projects which came into the UK during the 2008-2009 financial year as recorded in my blog of 29 June.
These figures are included in the new publication from the World Bank entitled, Global Development Finance 2009: Charting a Global Recovery. This briefing also warns that developing countries are expected to grow by only 1.2% this year, which is a serious decline from the 8.1% growth recorded in 2007 and 5.9% in 2008. In fact the situation can be shown to be even worse when India and China are excluded from the calculation. Then, GDP for the remaining developing countries is projected to fall by 1.6% with implications for greater job losses and increased poverty.
 The future is less secure for these children in Tanzania
Sub-Saharan Africa has been particularly hard hit by falling demand for exports, plunging export prices, weaker remittances as tourists holiday at home, and sharp falls in FDI growth. So much so that growth is expected to be only 1.0% this year.
Forecasts for developing countries as a whole for 2010 and 2011 show GDP growth is expected to pick up to 4.4% and 5.7% respectively, although this will still be slower than the years immediately before the recession.
According to Justin Lin, World Bank Chief Economist and Senior Vice President, Development Economics: “Developing countries can become a key driving force in the recovery, assuming their domestic investments rebound with international support, including a resumption in the flow of international credit.”
Tags: developing countries, FDI, GDP, global crisis, World Bank
Posted in Africa, Development, Foreign Direct Investment, GDP, International, Low-income countries, World Bank, economic growth | No Comments »
Tuesday, June 2nd, 2009
I came across this blog yesterday by Shanta Devarajan, the Chief Economist of the Africa Region at the World Bank, and thought that it would be good to copy it in full.
“In rich countries, when economic growth declines by three or four percentage points, people lose their jobs and possibly their houses, but they regain them when the economy rebounds. In poor African countries, children get pulled out of school—and miss out on becoming productive adults. In some cases, children die before they have a chance to go to school. If the current growth collapse is typical of the ones Africa has experienced in the past, an additional 700,000 African children may die before their first birthday.
In short, the effects of the global recession on Africa will be permanent. So the idea that aid may be threatened because of the recession in rich countries seems to have the logic backwards. Precisely because the effects in rich countries are temporary, resources should go to places where they may be permanent. Of course, there are political pressures to spend domestically. But do politicians in rich countries really think that a few more votes are worth more than the lives of the infants who will die as a result of the recession?
Furthermore, the relatively modest sum spent on aid to Africa in the past decade was at least partly responsible for the continent’s rapid growth. From 1998-2008, aid to Africa was increasing and economic growth was accelerating (to over 6 percent in 2007); poverty was declining and human development, especially primary school completion rates and the spread of HIV/AIDS, was improving. African countries had strengthened their macroeconomic policies—inflation had dropped to half its level in the mid-1990s—so that aid was more productive. Private capital was flowing in at a faster rate than in any other continent. All of these developments have come to a grinding halt because of the global economic crisis—a crisis that was not remotely the fault of Africans. By increasing aid to Africa, the international community has a chance to reverse this trend and prevent a temporary shock from having permanent consequences.”
You can follow his blogs at: https://africacan.worldbank.org/users/shanta
Tags: Africa, aid, recession
Posted in Africa, Low-income countries, aid, recession | No Comments »
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