Africa’s economy isn’t growing fast enough to meet targets to reduce poverty in the world’s poorest continent, the United Nations said.
Per-capita income will probably expand 2.7 percent in 2011 and 2.8 percent in 2012, lower than the 3 percent “minimum rate of growth to make a substantial dent in poverty,” the UN said in a statement released in Johannesburg today.
Rising commodity prices, better harvests and investments in rail and energy projects will help lift growth to 5 percent in 2011 and 5.1 percent in 2012, from 4.7 percent last year, the UN said. With a growing population, that may not be enough to meet the UN’s target of halving the percentage of people living in poverty by 2015.
“Persistent high levels of underemployment and vulnerable employment, as well as continued widespread malnourishment, will remain concerns in the near outlook,” the UN said.
In 2005, 51 percent of Africans lived on less than $1.25 a day, down from 58 percent in 1990 and far short of the 29 percent target for 2015, according to data from the UN.
The UN’s growth forecasts compare with 5.3 percent projected for sub-Saharan Africa in 2011 by the World Bank and the 5.5 percent estimated by the International Monetary Fund.
Ghana, which became Africa’s newest oil producer last year, will probably grow the fastest at 15 percent in 2011 and 8 percent in 2012, the UN said. South Africa’s economy, the biggest on the continent, is forecast to expand 3.2 percent this year and next, it said.
The UN classifies Ethiopia, which is expected to grow 9.4 percent this year, and Tanzania, with growth of 6.5 percent, as fast-growing economies in 2011. A slump in food production because of drought in Chad and Niger will make those countries among the worst performers, the UN said.
The UN estimated that world economic growth will ease to 3.1 percent this year from 3.6 percent in 2010, and reach 3.5 percent in 2012. That’s not enough to recover the jobs lost during the financial crisis, the UN said.
“It’s an anemic recovery, not fast enough,” Nobel prize-winning economist Joseph Stiglitz said in a speech in Johannesburg today. “Africa needs growth of at least 7 percent.”
Stiglitz said U.S. monetary policy is creating more volatility in exchange rates, prompting some countries to impose capital controls to curb the strengthening of their currencies. Emerging economies such as Brazil and South Africa criticized the Federal Reserve’s decision to purchase $600 billion in U.S. bonds, saying the money would lead their currencies to appreciate.
“It’s important for South Africa to take appropriate action to manage the exchange rate and manage capital inflows,” Stiglitz said.