Sub-Saharan Africa is expected to show a 5.8 per cent growth in 2013 with the domestic demand increasing. But businesses need to promote a more inclusive society in order to achieve this growth, said the African Development Bank (AfDB) today.
“We are looking at growth of around 5.8 per cent this year in Sub-Saharan Africa, excluding South Africa it would be 6.2 per cent,” AfDB president Donald Kaberuka said in an interview with Reuters.
Growth in Africa has been strong in the past few years, compared to the developed world. The World Bank sees global growth at 2.4 percent this year, with high income countries expected to see a rise of only 1.3 percent.
According to Kaberuka, mining and resources contributed a little over 30 per cent towards Sub-Saharan African growth, with consumer demand, infrastructure, financial services and agri-business being the other main contributors.
In May, Kaberuka plans to propose an infrastructure bond totaling up to US$24 billion, backed by the AfDB at the bank’s annual meeting in Marrakech. This would be bought by African central banks, to help investment in the region, he said.
Despite rapid growth on the continent, Africa still suffers from too much poverty and wealth inequality and needs to make more progress towards creating an inclusive society. The AfDB calculated that wealth inequality has been rising in Africa by approximately 1.5 percent annually since 2000.
“A lot needs to be done about equity…especially around natural resources management,” said Kaberuka. “Sometimes it seems that the rent-seeking elites and the extractive industry business live off each other. Otherwise, how can we explain that a country pumps out two million barrels of oil a day and yet half live below the poverty line?”
“Perhaps for too long we have been pointing fingers at governments, businesses have a responsibility here as well,” he added. “This is Africa’s trouble, which prevents us going to the next level.”