Friday, November 10th, 2006

Facing the Challenges of African Growth: Opportunities, Constraints, and Strategic Directions

Discussions Enrich Global launch of New WB Report at the TDLC

The full text of the study and related materials are available here.

The global launch of a new World Bank report “Facing the Challenges of African Growth: Opportunities, Constraints, and Strategic Directions” took place at the TDLC on November 10, 2006. Defining the four big “I”s needed to achieve growth in Africa – Infrastructure, Investment, Innovation, and Institutional Capacity -- the author of the Report, Mr. Benno Ndulu, provided a review of the study before a distinguished panel of Japanese government and development agency officials and an audience of nearly 100.

Japan a Consistent Supporter of Growth Agenda

The study was conducted by the Bank under its Africa Action Plan announced in September 2005. Tokyo was chosen for the launch to call attention to the significant role that Asia has to play in Africa, not only as a market and source of investment but as an inspiration for a successful development experience. In addition, “Japan has been a consistent voice in support of the growth agenda in Africa” noted the facilitator of the seminar, Mr. John Page, Bank Chief Economist for Africa.

Opening the seminar, the Banks’s Special Representative in Tokyo, Vice President Yukio Yoshimura reiterated the Bank Group’s commitment to growth and poverty reduction in Africa. To further these goals, “conducting policy dialogue and accelerating cooperation on specific projects with Japanese counterparts has become increasingly important”, said Mr. Yoshimura.

3 Key Questions

The report seeks to answer 3 key questions:What are the opportunities and options for growth available to the diverse range of African countries? What are the major constraints to exploiting these opportunities? What are the strategic chioces to be made by African governments and their partners to exploit these opportunities?

In his presentation, Mr. Ndulu, who is an Advisor to the World Bank Africa Region Vice President and Manager of the Partnership Group, began by examining the diverse growth experience of African countries spanning 45 years, noting that slow productivity growth and policy and governance issues accounted for the growth difference with other regions, with disadvantages from geography and the “resource curse” compounding difficulties.

Mr.Ndulu pointed to the 4 big “I”s as critical areas for action. While the unique situation in each country requires specific analysis, Africa can still learn from similarities for strategic direction, with an emphasis on energizing private investment and fostering efficiency and competitiveness. Mr.Ndulu concluded with key messages for both Africans and development partners. Africans are encouraged to shape their own destiny, to adopt unorthodox approaches for results, with leadership and collective action. Development partners are asked to provide more and better aid and a supportive global trading environment.

Japanese Policy Makers Respond

Commentators in Tokyo provided views based on their experience in development, reflecting different institutional and academic backgrounds.

From a policy perspective, Mr.Mitsuhiro Maeda, Director for Trade Finance, Trade and Economic Cooperation Bureau, Ministry of Economy, Trade and Industry, concurred with the significance of infrastructure in African development, but pointed to the need for financial mechanisms other than ODA.

Mr.Shigeki Kimura, Director, Development Institutions Division, International Bureau, Ministry of Finance, called the report “monumental”, recalling the past when Africa was regarded mostly as a recipient of aid for basic human needs. Mr. Kimura praised the report for its effort to change that perception, promoting the continent as a business investment opportunity. He also contributed his ideas on Asia and Africa, pointing to the role of the financial sector in Asia.

Mr. Naofumi Hashimoto, Director, Second Country Assistance Planning Division, International Cooperation Bureau, Ministry of Foreign Affairs, spoke from his ODA experience. “The report focuses on capacity building to promote business opportunities” said Mr. Hashimoto, “but capacity building is also important to ensure that recipients are capable of effective disbursement of ODA”.

African Leadership Crucial for Implementation

Representatives from development agencies offered comments based on their experiences in implementation. Mr.Yuichi Sasaoka, Senior Assistant to the Director General, Africa Department , JICA, gave high marks to the comprehensive nature of the report. On the assessment of Africa’s economic progress in the past decade, Mr. Sasaoka raised the issue of newly industrializing economies within the region and their role in Africa’s future.

Mr. Hitoshi Shoji, Deputy Director General, Development Assistance Department IV, JBIC, agreed that the report provided an excellent introduction to understanding the problems facing African countries. “The question for practitioners is how to solve these interrelated problems. The question for Africa is implementation, requiring leadership”. Mr. Shoji also commented on AIDs and agriculture as 2 vital issues lacking in the study.

Professor Motoki Takahashi, Vice Dean, Graduate School of International Cooperation Studies, Kobe University, also spoke about the importance of agriculture and its role in macroeconomic growth. Professor Takahashi called the Africa-Asia comparison a delicate issue, and encouraged the Japanese to learn from the African experience as well.