Home | Comment & Analysis    Monday 20 March 2017

Africa’s next level of economic transformation

separation
increase
decrease
separation
separation

By Jim Yong Kim

The G20 finance ministers met last week in Germany to discuss critical challenges facing the global economy, from climate change to migration to humanitarian emergencies like the unfolding famine in parts of Sub-Saharan Africa and the Middle East.

I left the discussions encouraged by the shared commitment to deal with these key issues. I shared how the World Bank Group is working to provide at least $1.6 billion for the famine-affected countries, steering funds to help those most vulnerable.

One of the most important undertakings at the G20 meeting, under Germany’s leadership, was the need to place a higher priority on the growth and development of Sub-Saharan Africa. There are many reasons, apart from the famine, why it is important to sharpen our focus on Africa.

The end of the commodity boom hit the region hard. In 2016, Sub-Saharan Africa’s growth slowed to an estimated 1.5 percent, the weakest pace in over two decades, as commodity exporters adjusted to low prices. That’s well below the annual economic growth the region was seeing before the global crisis. Regional GDP per capita contracted by 1.1 percent in 2016. Capital flows to the region, including FDI, declined in 2016. Overall investment growth dropped to near-zero in 2015 after averaging 5 percent from 2010-2015.

But Africa has shown significant signs of economic resilience, with 41 percent of Africans living in countries that have average GDP growth rates of over 5.5 percent. And in 2017, Sub-Saharan Africa is expected to see a modest rebound in growth, to 2.9 percent, rising above 3.5 percent in 2018 as the region continues to adjust to low commodity prices. This is a great opportunity for the international community to partner with the people of Africa to create conditions for faster growth and more sustainable development.

Last December, a coalition of more than 60 governments—from both developed and developing countries—helped replenish the World Bank Group’s International Development Association (IDA), our fund for the poorest, with a record $75 billion. Nearly 60 percent of this will be dedicated to Sub-Saharan Africa over the next three years, doubling IDA support for the region.

As part of the IDA funding, Africa is expected to have access to a significant level of resources through special finance windows to support regional programs and assistance to refugees, and an initiative to de-risk and mobilise private investment, especially in fragile environments.

A key priority is to help African countries invest in much-needed infrastructure by partnering with the private sector. The continent’s infrastructure needs are estimated at $93 billion, about 15 percent of the region’s gross domestic product. Right now, only $45 billion is invested in infrastructure—more than half of it being funded by the public sector. The financing gap is formidable, yet we know that investment in infrastructure can have a significant multiplier effect on growth for years.

At the same time, there are trillions of dollars of capital in the developed world seeking higher returns. We see tremendous opportunities in developing countries for private sector investment in areas like infrastructure, which is crucial for jobs and growth. To bridge this financing gap, we will work with governments and use our resources to de-risk and leverage more private sector investment.

On March 20, I will begin a visit to Tanzania and Rwanda to see how these countries have achieved results and what we can learn from their innovations. I hope to discuss the need for better coordination with the private sector in our efforts to help client governments improve the business climate and mobilise resources.

In these uncertain times, the World Bank Group will accelerate our support as countries in Sub-Saharan Africa work to reform their economies, diversify, and restore growth. Leaders understand the need for the tough second- and third-generation reforms that will lead to structural transformation. They know they cannot wait for sequential reforms, but need to work in parallel on many different fronts.

This sense of urgency will drive the World Bank Group’s work in Africa over the next three years. Working together, we can help African countries achieve the next level of economic transformation and meet the aspirations of the people we serve.

The author is the President of the World Bank Group.



The views expressed in the 'Comment and Analysis' section are solely the opinions of the writers. The veracity of any claims made are the responsibility of the author not Sudan Tribune.

If you want to submit an opinion piece or an analysis please email it to comment@sudantribune.com

Sudan Tribune reserves the right to edit articles before publication. Please include your full name, relevant personal information and political affiliations.
Comments on the Sudan Tribune website must abide by the following rules. Contravention of these rules will lead to the user losing their Sudan Tribune account with immediate effect.

- No inciting violence
- No inappropriate or offensive language
- No racism, tribalism or sectarianism
- No inappropriate or derogatory remarks
- No deviation from the topic of the article
- No advertising, spamming or links
- No incomprehensible comments

Due to the unprecedented amount of racist and offensive language on the site, Sudan Tribune tries to vet all comments on the site.

There is now also a limit of 400 words per comment. If you want to express yourself in more detail than this allows, please e-mail your comment as an article to comment@sudantribune.com

Kind regards,

The Sudan Tribune editorial team.

Comment on this article



The following ads are provided by Google. SudanTribune has no authority on it.


Sudan Tribune

Promote your Page too

Latest Comments & Analysis


Egypt’s Strategic Water Security: The myth and the truth 2017-03-24 08:19:56 By Ermias Hailu Following to the end of the second world war Egypt’s failure to integrate Eritrea to its territories, due to Emperor Haile Selassie’s superior diplomatic skills, the then Pan- Arab (...)

South Sudan famine is a wake-up call to revive dead peace deal 2017-03-20 15:57:01 By Brian Adeba News that a famine has been declared in South Sudan is yet another stark reminder of the ever evolving nature of war-induced fragility in Africa’s newest country. As the world (...)

Africa’s next level of economic transformation 2017-03-20 05:57:00 By Jim Yong Kim The G20 finance ministers met last week in Germany to discuss critical challenges facing the global economy, from climate change to migration to humanitarian emergencies like the (...)


MORE






Latest Press Releases


Statement by South Sudanese Communist Party on the National Dialoguel 2017-03-22 05:44:42 The Communist Party of South Sudan On the Initiative of the National Dialogue The initiative taken by the President of the Republic of South Sudan declaring a need for a national dialogue is an (...)

An Appeal to President of the Republic of South Sudan 2017-03-15 07:22:45 Dear. Mr. President, I write to appeal to you for the release of political detainees now in the custody of the National Security Service at Jebel and other detention facilities. In doing this, I (...)

Militias of Bashir’s Regime and the Proxy War (1) 2017-02-08 21:49:09 Sudan Democracy First Group Militias of Bashir’s Regime and the Proxy War (1) War in the Blue Nile: Militias in the hunt of refugees and displaced population Introduction Throughout its rule, (...)


MORE

Copyright © 2003-2017 SudanTribune - All rights reserved.