Economic growth fails to reduce poverty in Africa

By Simegnish Yekoye

ADDIS ABABA, Ethiopia - Dr. Maxwell M. Mkwezalamba, the African union’s commissioner for economic affairs has stated that despite economic growth rates of at least five percent per annum by most African countries in the last three to four years the growths have failed to generate adequate employment and significantly reduction in poverty levels.
According to the Commissioner the relatively high economic growth rates may not be sustainable owing to their having largely emanated from increases in demand for Africa’s commodities and price of fuel.

Dr. Mkwezalamba, remarks came on Wednesday during the opening of the committee of experts of the first joint annual meeting of the AU conference of Ministers of Economy and Finance at the ECA conference of African Ministers of Finance, Planning and Economic development.
Dr. Mkwezalamba also indicated many African countries are unlikely to meet the Millennium Development Goals (MDGs) by the target date of 2015 scoring low points in the overall MDG indicators.
"Almost half of the population continues to live in extreme poverty and hunger. Africa is at the bottom of the health related human development indicators and the continent continues to be ravaged by HIV and AIDS", said Dr. Mkwezalamba.

Despite the 11.8% annual average GDP growth the Ethiopian government announceds repeatedly, as one country in Africa, the country is suffering from escalation in food and energy prices resulting high economic inflation.
"The Ethiopian economy has witnessed annual average real GDP growth rate of 11.8% during the last four years ending in 2006/2007," said Ethiopia’s State Minister of Ministry of Finance and Economic Development Mekonen Manyazewal.
The Prime Minister Meles Zenawi also said the inflation is a short time phenomenon which will go away as the government is trying to increase people’s income by expanding the domestic production of basic goods and ensuring rapid economic growth.

However, according to Dr. Mkwezalamba, world food shortage cannot be understood as a temporary phenomenon or a simple supply and demand dilemma. "Rather, a number of complex and interrelated forces are behind the development," he said.
The commissioner also emphasizes agricultural production as being vulnerable to shocks because it is intimately connected to climate trends, declining water tables and weather related disasters.
"Growth in Africa has not generated the quantity and quality of jobs that will help to significantly reduce poverty," also said UN Under-Secretary-General and Executive Secretary of ECA, Abdoulie Janneh, during the opening ceremony of the conference.

Ethiopian State Minister Mekonen also sated that the low level of productivity of the agriculture sector is one of the challenges Ethiopia is facing together with high incidence of poverty, prevalence of shocks, still high urban for employment, access to service and other constraints.
This preceding conference held by a technical preparatory meeting of the committee of experts ahead of the joint AU and ECA conference of Ministers of finance, planning and economic development is expected to address the major economic and social issues in African development.

"The conference should come up with options available for African countries to absorb the adverse impact of rising food and energy prices and exploit the opportunities that they present to the continent," said Mkwezalamba.
After the conference of experts concludes tomorrow, Saturday day March 29, 2008, the Minster level conference will take place from 31 March to 2 April 2008.
These joint meetings are expected to provide platforms for in-depth discussions and policy debate of challenges such as rising oil and food prices and the global crisis both of which can lead to slowdown in key economies and also impact negatively on Africa’s external debt situation.