The World Economic Forum on Africa will open in Cape Town, South Africa on June 4, 2008. Before the opening of the forum, good news blew in. The African Economic Outlook forecasted that the African economy will grow by 6% in 2008 and 2009. It is indeed pleasant news that Africa will grow rapidly amidst a global economy that has slowed down under the influence of the US Subprime Mortgage Crisis.
2008 is the fifth year that Africa has maintained economic growth above 5 percent since 2004, when Africa first achieved 5 percent economic growth. The African Economic Outlook forecasts that 31 African countries will see economic growth over 5 percent; and 16 over 3 percent. The IMF predicts sub-Saharan Africa will retain economic growth of 6.5 percent this year.
Various factors have contributed to the rapid growth of the African economy. Of them, the internal factors are the key driving force. Improvement in the security situation, which is worth mentioning most, has cleared the obstacles to economic development. By the end of 2000, 15 African countries were still at war. That number has reduced to 5 today. Peace has brought with it the opportunity for development. Having adopted a market-oriented economic policy and an improved investment environment, many African countries have witnessed annual growth over 20 percent in foreign direct investment (FDI). Meanwhile, African countries are focused on sustainability; realizing economic diversity; and increasing investment in infrastructure, education and innovation.
The world's attention for Africa has also created new opportunities. The big powers have increased aid and investment to Africa out of consideration for the diversity of energy imports. As a result, resource countries in Africa are able to establish a primary industrial system and create conditions for economic diversity. Unilateral or multilateral debt-write off plans by some countries and international organizations has alleviated economic burdens on many African nations, enabling them to increase public investment. New rising economies like China and India have frequent trade and economic relations with African countries which gives room for economic relations to expand.
Economic integrity has been deepening in Africa. Since the signing of the Treaty establishing the African Economic Community in 1991, Africa has made outstanding achievements in economic integrity. Trade barriers within the continent have been decreasing and mobility of commodity, fund and personnel is increasing. At present, there are 200 economic cooperation organizations in Africa, which make the resource distribution even convenient. African countries have given priority to infrastructure, putting large amounts of energy into communication and human resources development, in effect creating conditions for sustainability.
Needless to say, Africa still faces many challenges: imbalance in economic growth; inflation pressure; and a food crisis. The weak infrastructure, overwhelming debt, and lack of foreign aid will hinder Africa's development. Some analysts predict Africa needs to maintain an annual growth of over 7 percent for 15 to 20 years in order to achieve poverty reduction goals.
Despite this, Africa's economy is full of hope. Over the past 30 years, Africa experienced economic breakdown and stagnancy. But the continent had shown vigor in the past dozen years. The once "hopeless continent" is bearing new hope. UN Secretary-General Ban Ki-moon said the 21st century will be "Africa's century," provided that it realizes the millennium goals. He said he believed this will no longer be a dream if Africa maintains rapid economic growth.
By People's Daily Online
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