Technology is key to unlocking further African economic growth

Improving science and technology training and modernizing services could help boost Africa’s economic growth prospects, says the World Bank.  The World Bank on Monday said economic growth in sub-Saharan Africa is forecast to hit 5.2 percent in 2014, up from 4.7 percent in 2013.

Rising investment in natural resources and infrastructure, and strong household spending are factors driving Africa’s growth, according to the World Bank’s twice-yearly ‘Africa Pulse’ analysis of the issues shaping the continent’s economic prospects.  However, the World Bank notes that Africa’s economic growth could be accelerated even further if it adopts improved and broader science and technology training.

“High-quality university programs in Africa, particularly in areas such as the applied sciences, technology, and engineering, could dramatically increase the region’s competitiveness, productivity and growth,” says Makhtar Diop, the World Bank Group’s vice president for Africa, in a statement.

Diop also added, “Strategic reforms are needed to expand young people’s access to science-based education at both the country and the regional level, and to ensure that they graduate with cutting-edge knowledge that is relevant and meets the needs of private sector employers.”   The World Bank went  on to note that globalization of services is a potentially important source of growth for developing countries, especially for those in Africa.

The World Bank says that at over $50 billion, Africa’s “services exports trail all other developing regions; however, it is expanding annually at about 12 percent, on average.”  The global financial body advises that African businesses then could do more to use technology and outsourcing to “overcome their old constraints such as physical and geographic proximity” to boost its services sector.

In a statement, the World Bank said, “Modern services, such as software development, call centers, and outsourced business processes, can be traded like value-added, manufactured products, enabling developing countries that focus on such services, innovation, and technology to leverage services as an important driver of growth.”

Overall; though, investment and trade in Africa continues its upward trajectory.  The World Bank in its report says that capital flows to sub-Saharan Africa reached an estimated 5.3 percent of regional GDP in 2013, above the developing-country average of 3.9 percent.

Meanwhile, net foreign direct investment (FDI) inflows to the region grew 16 percent to a “near-record $43 billion in 2013, boosted by new oil and gas discoveries in many countries including Angola, Mozambique, and Tanzania.”  Inflation in the region also slowed to 6.3 percent in 2013, compared with 10.7 percent in 2013.

Source: ITWeb Africa