Africa and Economic Development

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Economic Growth Has No Impact On Poverty War

The East African (Nairobi)
NEWS
May 23, 2006
Posted to the web May 23, 2006

By Kevin J. Kelley, Special Correspondent
Washington, DC

East Africa's generally strong economic performance is failing to produce significant progress toward anti-poverty goals, according to a report by a grouping of donor countries.

The finding suggests that in Tanzania and Uganda, which had two of the highest growth rates in East Africa, economic improvements are largely confined to better-off segments of society and are not filtering down to the poorest citizens.

The region's growth rate exceeded that for black Africa as a whole last year, according to the latest African Economic Outlook report by the Paris-based Organisation for Co-operation and Development (OECD).

East Africa's economy expanded at an average 5.6 per cent rate in 2005, compared with 4.9 per cent for all of the sub-Saharan region.

Tanzania and Uganda helped lead the way, achieving growth rates of 6.9 per cent and 5.8 per cent, respectively. Kenya lagged behind not only its neighbours but black Africa as a whole, the OECD reports, adding, however, that growth is expected to accelerate in Kenya this year and next.

Inflation figures are encouraging as well. The average rate of price increases in East Africa fell from 8.4 per cent in 2004 to 7.6 per cent last year, the report says. Inflation climbed in Uganda however, from 5 per cent in 2004 to 8.2 per cent in 2005.

Further reductions in inflation are forecast for almost every country in East Africa this year and next, the OECD adds.

Despite these positive economic indicators, neither Kenya, Tanzania nor Uganda is on course to meet a majority of the Millennium Development Goals set by the United Nations.

Uganda is not likely to reach any of the nine goals by the target year of 2015, according to the OECD assessment.

Kenya is on track to attain three of the goals and has already achieved a fourth.

It is progressing satisfactorily toward halving the number of people living in extreme poverty, halving the number without access to safe drinking water, and achieving parity in male-female enrolment in secondary schools.

Kenya already educates as many girls as boys in primary schools.

Tanzania is on track toward ensuring that all children enrolled in first grade complete at least fifth grade and is moving toward gender parity in primary schools. Likewise it is progressing in its efforts to halve the number of people without safe water.

All three East African countries are failing to make significant reductions in infant and maternal mortality rates. They also are not heading toward the goal of halting the spread of tuberculosis.

Tanzania is singled out for praise in a special section of the OECD report on efforts to develop its infrastructure. The privatisation of Dar es Salaam's container terminal has been hailed "as one of the most successful of its type in the world."

A company backed by Hong Kong-based Hutchinson-Whampoa was granted a 10-year lease to manage Dar es Salaam's container terminal in 2000. In 2001-02, the company invested $7 million to equip the terminal with four gantry cranes as well as a sophisticated computer system, says the report.

The number of ships calling at the port of Dar es Salaam has increased from 30 to 50 a month, and the number of containers shifted has risen from 100,000 to 165,000 per year.

Improvements in Africa's infrastructure should become a focus of the African Development Bank, a United States Treasury official said last week at a separate Press briefing. He said the US would encourage movement in that direction at the bank's annual meeting in Burkina Faso, which took place last week.

The Bank ought to stop trying to reach an ever-expanding set of goals and instead narrow its financial activities to a few key areas, said Clay Lowery, assistant Treasury secretary for international affairs. "It should not be a mini-World Bank," said Mr Lowery.

In addition to infrastructure development, the regional lender should concentrate on fighting corruption and working with the private sector wherever possible, he said.

Copyright © 2006 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).

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