Vol. 5 Num 717 Sun. June 04, 2006  

African economic forum spins optimistic outlook

Encouraging economic growth, good prospects, and an attractive climate for investment: that is the picture the World Economic Forum in Africa has painted of the poorest continent as it seeks to boost a promising spurt of expansion.

The optimistic tone permeated the three-day conference in the South African city of Cape Town, which wrapped up Friday, and brought together some 700 representatives from business and government, according to organizers.

"We come to this conference in an atmosphere of hope," declared South African President Thabo Mbeki, as he pointed to Africa's 5.5 percent growth rate in 2005.

That optimism was backed up by recent surveys.

Some 52 percent of Africans are optimistic about the future, according to a poll released at the start of the "African Davos" forum. The survey conducted by the Gallup Organization in 61 countries worldwide -- including eight in Africa -- found that Africans were more hopeful than the rest of the world that 2006 will be better than last year.

The upbeat outlook also is supported by the International Monetary Fund (IMF) which forecasts an economic growth rate of 5.8 percent for Africa this year, the continent's best performance in more than 30 years.

To help bolster the continent's economic prospects, political, business and civil society leaders at the forum launched the African Investment Climate Facility (ICF) with the goal of making Africa a better place in which to do business.

The continent has been attracting more investment especially for the new economic powerhouses, China and India, the forum's organizers said.

African trade with China has tripled in five years, and Beijing is granting Africa loans, securing energy contracts and committing to strategic infrastructure projects.

Indian companies now dominate Africa's steel production and are also investing in telecommunications, computer technology and automobile sectors.

However most Africans still do not benefit from the continent's improving economy, as nearly 300 million people continue to live on less than one dollar a day.

Mbeki noted that it will take time for economic growth to affect the vast population of Africa, and also recognized the need to improve such sectors as agriculture.

He said African Union leaders had agreed to set aside 10 percent of their budgets to develop agriculture.

This measure is "precisely to address these challenges of poverty, of job creation, given that more than the majority of our population are in the rural areas," said Mbeki.

Yet Africa has to take into account the competition in the global marketplace, commented Maria Ramos, head of the South African public transport group Transnet.

"We have to be realistic, we have to compete in the global economy," Ramos said.

"When we talk about growth, we must accept that we are going to lose jobs in some sectors.... That's also part of being part of the global economy."