Sub-Saharan Africa: The economies of sub-Saharan Africa, home to some of the most extreme and pervasive poverty in the world, will grow at a healthy pace next year, International Monetary Fund (IMF) economists said over the weekend.
The news came at the annual meetings of the IMF and World Bank.
The fund's projections have African nations growing more slowly than emerging East Asia, but on the right track; its economists expect 6 per cent growth in total output forecast this year and nearly 7 per cent growth in 2008.
Inflation has been contained across most of Africa, excluding Zimbabwe (where there has been hyperinflation), according to the fund's annual regional economic outlook.
"African economic policies are far better than in the past," Abdoulaye Bio-Tchane, African development director of the IMF, said of the improvement. "Deficits are going down, inflation is going down . . . the growth rate is picking up based on those strong policies."
Robert Zoellick, president of the World Bank, is trying to raise nearly $40 billion (€28 billion) over the coming months for a fund that will pay for development projects for the world's 81 poorest nations, most of them in Africa. Raising the money though is likely to be challenging.
Many countries are facing tight budgets and wish to control their aid activities themselves rather than turn money over to the World Bank as an intermediary.
Developing countries such as China and India are home to hundreds of millions of very poor individuals, but those countries can easily raise money for development projects through private capital. The countries that don't have access to private capital markets, and thus most need help from an organisation like the World Bank, tend to have unstable or corrupt governments.
Donors though are wary of funding projects in which big chunks of the money may get siphoned off. Mr Zoellick's predecessor, Paul Wolfowitz, made fighting corruption his top priority, and an outside commission chaired by former US Federal Reserve chairman Paul Volcker recommended an overhaul of the World Bank's fraud-fighting unit in a report last month.
Mr Zoellick said last week the bank's role must go beyond financing roads, dams and other infrastructure. "Many people think that our role is just the traditional World Bank of the 1960s, of project finance," he said. "Our real role is helping to create the markets, the intermediation, the institutions, so these things go on long beyond us."
There is little that the World Bank could do for regimes that were corrupt at the very top, said Raymond Fisman, a Columbia University economist who studies corruption.
"If the top guy in the country isn't buying into it, there's not much hope," he said, "but if there is genuine interest in reform, the World Bank can play a very good role in figuring out how best to implement anti-corruption reform."
Nigeria offers an example of the challenge. A major oil exporter, it has been enriched in recent years by high energy prices.
The IMF said on Saturday that it expected the Nigerian economy to grow by 8 per cent next year. However it also has a legacy of being one of the most corrupt nations in the world, under a succession of military leaders. (It now is controlled by civilians.)
On Saturday, Nigerian finance minister Shamsuddeen Usman said that the country had made steady progress eradicating corruption. For example, he said, he and other leaders were now publicly disclosing their assets.
- (LA Times-Washington Post service)