Reuters AlertNet Lite - African economies grow, but prosperity elusive-UN

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African economies grow, but prosperity elusive-UN

28 May 2007 14:37:02 GMT
Source: Reuters

JOHANNESBURG, May 28 (Reuters) - Economic growth in Africa continues to accelerate at a faster pace than in the developed world but the world's poorest continent is still struggling to improve the lives of its people, a United Nations report found.

The United Nations 2007 mid-year World Economic Situation and Prospect report found that growth in Africa is likely to average six percent in 2007, compared with world gross domestic product growth of 3.4 percent this year.

"Africa's good recent growth record represent a major turnaround from previous decades of Africa's economic stagnation," the report released in Johannesburg said.

The resource-rich continent has benefited largely from a boom in commodities prices, while economies of oil-exporting countries were on average more robust than those countries that imported oil.

But growth was largely still largely based on raw materials, making it vulnerable to downturns in cycles.

"Growth is highly concentrated in a narrow range of activities, making many African economies extremely vulnerable to exogenous factors such as weather conditions, terms of trade and aid flows," the report said.

The U.N. report said political and social tensions in the continent restrained economic growth, and some of them were still not growing fast enough to meet the Millennium Development Goals, including halving poverty. The goals lay down a series of social and economic targets that countries should achieve by 2015.

Even those countries that were growing fast -- such as South Africa -- were struggling to create jobs and cut poverty. South Africa's economic growth of above 5 percent for the past three years has not significantly reduced unemployment, which is still officially estimated at 25.5 percent.

Africa faced the dual challenge of further increasing growth rates and sustaining these rates over an extended period. The U.N report said increased public spending on infrastructure will bolster growth on the continent.

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Last updated:Mon May 28 14:39:13 2007