2.1 Overview
P
reliminary estimates by ECA-SA indicate that overall GDP grew by an average of 3.6 per cent, reflecting improvements in the prices of key export commodities such as gold, oil, diamonds and copper. Mozambique remained the fastest growing econo-my in the sub-region, with a GDP growth rate of 10.2 per cent as can be seen in Table 1.3.This growth rate was a result of sound macroeconomic policies, and a good investment climate. Economic growth in South Africa and Botswana are also estimated to have im-proved in 2003 due to improvements in the prices of gold and diamonds, respectively.
2.2 Economic Growth and Poverty Reduction
Economic growth is necessary to meet the goal of poverty reduction for two reasons. First, economic growth directly reduces income poverty for many households, increasing their savings and freeing resources for investment in human development. Second, economic growth tends to increase government revenue. Because most investment in human de-velopment, such as health, nutrition, education, infrastructure, comes from the public sector, greater fiscal resources are critical to reducing poverty.1
While economic growth is necessary for increased public expenditure on human develop-ment, some governments tend to neglect such investment or discriminate in their provi-sion among the population groups, thereby weakening the potential benefits that overall economic growth can provide for meeting the goal of reducing poverty. Thus the strong links between economic growth and poverty reduction are mediated by policy choices and structural factors.
Recent studies suggest a strong relationship between poverty and agroclimatic conditions in various African countries (ECA, 2002). Large differences in living standards between regions in the same country are correlated with unequal distribution of natural assets, differences in agroclimatic conditions, or differences in geographic conditions, such as remoteness from markets and transport routes (ECA, 2003). In addition, addressing spa-tial poverty also depends on how resources are translated into basic services for the poor
in such areas as health, education, water and sanitation, and energy. Public spending on these services is often biased against the poor and against rural dwellers (ECA, op. cit).
It is well recognized that if African countries have to make meaningful progress towards reducing the number of people living in poverty, they will have to maintain a high growth rate continuously for an extended period of time. However, during the period under re-view, poverty reduction has remained a daunting social and economic challenge in Africa, with close to half the population of the continent living below $US1 a day. Access to jobs, education, health services, housing and water supply remains inadequate for the majority.
Table 1.3: GDP Growth Rates by Countries, 2000-2004
Country 2000 2001 2002 2003E 2004F
Angola 2.4 3.5 11.7 10.5 8.5
South Africa 3.1 2.5 3.0 2.7 3.5
Swaziland 2.5 2.6 1.6 2.4 3.0
Zambia 3.0 5.2 3.7 3.2 3.1
Zimbabwe -4.1 -7.3 -8.5 -8.8 -4.7
Source: EIU Country Reports, ECA and country sources E = Estimates F = Forecast
African countries have been pursuing poverty reduction strategies for decades. Currently, these strategies require new political momentum for faster progress on reducing poverty as is already underway in most countries. As governments begin to assess whether and how reducing poverty by half will be achieved by 2015, they are also assessing policy pri-orities and developing national strategies, such as the Poverty Reduction Strategy Papers (PRSPs). To this end, several countries have increased social spending and launched new programmes in support of poverty reduction.
Despite these efforts, in most African countries, including those in Southern Africa, eco-nomic growth has been unable to register a significant impact on poverty, either because it is insufficient or is insufficiently pro-poor in both its quality and structure. Although average incomes have risen and fallen over time, many of the countries in Southern Africa with sufficient data to calculate the Human Development Index (HDI) during the period 1990-2001 saw a drop in the HDI. According to the UNDP Human Development Re-port 2003, out of the 21 countries that saw a drop in the HDI for the period 1990-2001, six are from the Southern African sub-region. The countries referred to are Botswana, Lesotho, South Africa, Swaziland, Zambia and Zimbabwe2.
The HDI measures three important dimensions of the human development concept: liv-ing a long and healthy life, beliv-ing educated and havliv-ing a decent standard of livliv-ing. Thus, the HDI combines measures of life expectancy, school enrolment and literacy and income
to allow a broader view of a country’s development than using income alone. According to the report, much of the decline in HDI during the 1990s can be traced to the spread of HIV/AIDS, which has lowered life expectancies and lowered economic growth and incomes.
2.3 Governance
Since the beginning of the 1990s, Southern African countries have made significant prog-ress in institutionalizing democracy and good governance. This has been reflected in a number of developments taking place in the sub-region, such as constitutional limits on Presidential terms of office; setting up democratic institutions, multi-party elections; the increase of popular participation in governance and dialogue between governments, civil society and other stakeholders. In addition, a number of constitutional, legal and adminis-trative changes have also been undertaken with the objective of consolidating and deepen-ing democracy. Sub-regional structures to support such processes include the SADC Elec-toral Commissions Forum, the ElecElec-toral Institute of Southern Africa, the SADC ElecElec-toral Support Network and the SADC Parliamentary Forum. These organizations have commit-ted themselves to supporting growth and deepening democracy in the sub-region.
In addition, commendable efforts are being made to institute the separation of the legisla-tive and execulegisla-tive powers, the independence of the judiciary, democracy through freedom of the press and political pluralism. However, while some Southern African governments have managed to establish representative parliaments, they do not yet have the material means or the required capacity to fulfill their triple function of national representation, legislative output and control of governmental activity. This results essentially from the lack of a true parliamentary tradition, which is a consequence of more than 30 years of one-party rule in many countries that did not allow parliamentary institutions to acquire the necessary means and mechanisms to operate in a system where powers are separated.
ECA is organizing the Fourth African Development Forum (ADF IV) on the theme, “Good Governance for a Progressing Africa” in October 2004 in Addis Ababa, Ethiopia. The aim of the ADF is to connect the decision-makers with the best policy advice, informed by cred-ible analytical work and relevant experiences. The Forum will discuss and examine ways of improving governance in Africa and make concrete recommendations on mechanisms for instituting and monitoring good governance. The preparatory sub-regional workshop for Eastern and Southern Africa was held in Lusaka, Zambia 24 – 26 November 2003.
Endnotes
1 UNDP, Human Development Report 2003.
2UNDP, Human Development Report 2003.