World Bank president, David Malpass, has said that three of Africa’s biggest economies – Nigeria, South Africa and Angola- have not performed well in recent times and that has been a key obstacle to foreign investment flow into the continent.
Malpass said this in his article titled ‘Africa needs to seize this golden chance’, on Monday, January 20, 2020, in relation to the UK-Africa investment summit.
The World Bank had said in its January 2020 Global Economic Prospects that Growth in Nigeria is expected to remain subdued. The macroeconomic framework—characterized by multiple exchange rates, foreign exchange restrictions, high persistent inflation, and a central bank targeting manifold objectives—does not provide a firm anchor for confidence.
Another challenge he identified was that cross-border trade and investment, which are vital for growth, are not making enough progress to lift Africa’s average growth rate, saying that vested interests are at the core of both challenges.
Read also: World Bank projects weaker growth for Nigeria at 2.1% in 2020-22
Growth in Sub-Saharan Africa moderated to a slower-than-expected 2.4 percent in 2019. Activity was dampened by softening external demand, heightened global policy uncertainty, and falling commodity prices.
He identified four areas that need urgent attention, the first being reforming state-owned enterprises and de-monopolizing markets for greater competition. “For many nations, the government footprint remains excessive, crowding out private-sector activity in agriculture, transport, and energy”.
Secondly, he said Africa needs to reduce barriers to cross-border trade. “Red tape and excessive regulation keep goods, services, ideas, and resources from flowing freely among countries. More intra-regional trade can generate pressure and resources for improved infrastructure”.
Third, he said government debts and investments need to be more transparent. This will give people more voice in the contracts and commitments made by their governments, a critical basis for implementing the rule of law.
Fourth, the region must address “learning poverty”. “Our recent study reported on children’s ability at the age of 10 to read a basic story. In some African countries, as many as 80 percent can’t do this. UK leaders, including the Prime Minister, have strongly supported programs to keep girls in school long enough to learn skills and break out of poverty”.
“As donors and investors, we can all agree that the time for Africa is now. We must not wait for every economic condition to be perfect. Let’s seize the moment and start delivering immediate wins that can rapidly transform economies and improve people’s lives,” Malpass said.
