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SSA was the only region not to make any progress in reducing the population share in poverty

Photo credit: IPS

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. Credit: Tommy Trenchard/IPS

Opinion: Sub-Saharan Africa, Addis and Paris

By Jomo Kwame Sundaram and Rudi von Arnim

Jomo Kwame Sundaram is Coordinator for Economic and Social Development at the Food and Agriculture Organization of the United Nations in Rome. Rudi von Arnim is Associate Professor of Economics at the University of Utah, Salt Lake City.

After the turn of the century, growth in sub-Saharan Africa (SSA) picked up again after a quarter century of near stagnation for most, mainly due to increased world demand for minerals and other natural resources.

The region became second only to East Asia in recovering from the global slowdown following the 2008-2009 financial crisis.

Thanks to the failure of development over the preceding quarter century, SSA was the only region not to make any progress in reducing the population share in poverty, with the number of poor people actually rising significantly.

During the decade 2003-2013, growth was faster, averaging 2.6 percent per capita annually. The SSA growth acceleration of the past decade fueled hopes that growth on the continent had finally begun to accelerate and catch up.

Annual SSA per capita real GDP growth had averaged a respectable two percent in the 1960s, but had slowed down from the late 1970s. Over the next two decades, real per capita income for sub-Saharan countries shrank by about three quarters of a percentage point annually on average.

While SSA growth resumed in the last decade, reliance on natural resource extraction has compromised its developmental impact. Such economic activity, especially in mining, has few linkages to the rest of the national economy, thus limiting its growth and employment creation impacts as well.

As its economic performance has closely followed the vagaries of the global commodity price cycle, SSA growth in the last decade was largely driven by the minerals boom on the continent.

But the high commodity prices of the past decade have been reversed by the spreading global economic slowdown and the Saudi decision to drastically reduce oil prices.

However, natural resource extraction does not have the same potential to accelerate development as manufacturing. No country has successfully developed without substantially increasing manufacturing or high-end services. Sub-Saharan Africa has not done well on this score in recent decades.

While the manufacturing share of GDP for all developing countries has risen over 23 percent, it has fallen in SSA to 8 percent from 12 percent in the 1980s. Meanwhile, the primary commodities’ share of total SSA exports reached almost 90 percent in the past decade.

Premature and inappropriate trade liberalisation has damaged SSA’s limited export capacities

Read the full article: IPS

Published by

Willem Van Cotthem

Honorary Professor of Botany, University of Ghent (Belgium). Scientific Consultant for Desertification and Sustainable Development.