Africa unleashed IN CONGO, copper transported from the copper belt region takes an average of two to three weeks to reach the port of Durban. The same distance in Europe would be covered in two days. This is one of the main challenges facing Africa's growth, according to Omnia Helmy, lead economist at the Egyptian Centre for Economic Studies. In fact, according to Helmy, road density in Africa is less than seven kilometres per 100 square kilometres of land, the lowest in the world. Speaking at a seminar organised by ECES on "Unleashing Africa's potential as a pole of global growth," Helmy used the example to show that physical infrastructure is one of the main challenges facing the black continent, according to the 2012 Economic Report on Africa prepared by the UN Economic Commission for Africa (UNECA). This challenge, along with a hoard of other challenges, keeps Africa from achieving its full potential. According to UNECA's 2012 report, out of the top 15 fastest growing economies in the world today, 10 are African. And the continent's contribution to world GDP is projected to increase from 2.4 per cent in 2012 to 5.1 per cent in 2034. According to Adam Elhiraika, chief macroeconomic analyst at UNECA, Africa managed to weather the global economic crisis quite well. And despite existing challenges in the global economy, Sub-Saharan Africa grew by 4.7 per cent in 2011. Further, Elhiraika said, more than four per cent in growth is expected in 2012 and 2013. Elhiraika added that growth has not translated into meaningful social development. Elhiraika said that for Africa to achieve its full potential in terms of meeting the hopes and aspirations of its people and contributing meaningfully to global growth, certain reforms are needed. To start with, he advocated for an active role of the state; the state should have an industrial policy to address the constraints of the private sector, otherwise the latter alone cannot achieve the growth it desires. He also underlined the importance of investing in human capital and technology and in physical infrastructure. Elhiraika pointed to the huge potential for agricultural production and regional economic integration in Africa. Helmy too acknowledged that Africa faces obstacles to its structural transformation. Foremost among these is Africa's young population. Africa is expected to represent 15 per cent of world population by 2050 compared to 10.8 per cent in 1980. And Africa's share of the world's youth, between the ages of 15 and 24, is projected to grow to 31.3 per cent. Currently this share is 17.5 per cent. Another obstacle is growing income inequality, poverty and unemployment. Helmy showed that despite growth in recent years, income inequality has not declined. Six out of the 10 most unequal countries are in Africa. And more than half of the population of 500 million people still lives in poverty. Helmy agreed that agriculture is important to Africa's wellbeing. She said that most African countries are agricultural, and despite the fact that agricultural labour comprises 59 per cent of the total labour force and contributes 13 per cent of value added to GDP, the lives of more than 13 million people were affected by high food and fuel prices and drought in 2011. Political conflict is another setback to Africa's growth. Helmy illustrated that between 1990 and 2005, the cost of conflict in Africa was equivalent to international aid to the continent over the same period. The cost of conflicts and aid from 1990 to 2005 amounted to $284 billion. CBE keeps rates ateady THE CENTRAL Bank of Egypt (CBE) Monetary Policy Committee (MPC) decided to keep the overnight deposit rate and overnight lending rate unchanged at 9.25 per cent and 10.25 per cent respectively, and the seven-day repo at 9.75 per cent. The discount rate was also kept unchanged at 9.5 per cent. According to CI Capital Holding, the decision is supported by maintained low inflation, which stood at 8.3 per cent and 7.2 per cent for headline and core inflation respectively in May. CI Capital said the government should be trying to maintain a balance between supporting investment and propping up the local currency. Continuing the positive trend, time and saving deposits in local currency saw a high single-digit year-on-year (Y/Y) growth of 8.3 per cent in April 2012 compared to a monthly average growth of 3.4 per cent Y/Y. Moreover, demand, time and saving deposits in foreign currency growth slowed to a low of 2.4 per cent Y/Y compared to 14.9 per cent growth in April 2011. Arab help THE ARAB Monetary Fund (AMF) announced Sunday it is preparing a $65 million credit facility for Egypt. The money, according to AMF, is to help Egypt's trade processes with other Arab countries amid political instability that would affect the balance of payments. The fund stated that Egypt already suffers from a balance of payments deficit that reached $11 billion in the first nine months in the fiscal year 2011-2012, because of the apparent decrease in capital inflows. Nonetheless, Farouk El-Okda, governor of the Central Bank of Egypt, said during a meeting on Sunday with AMF officials that the capital and income of Egyptian commercial banks remain "strong" and are getting better. Cleaner Alexandria THE GLOBAL Environment Facility (GEF) has earmarked LE1.5 million -- to be financed by the Italian government -- for the transfer of environmentally friendly technology in Alexandria. The Egyptian government will contribute LE250,000 to the same purpose. The endeavour is part of a $1.5 billion project targeting the transfer of environmentally friendly technology to the South Mediterranean. Besides Egypt, the project also includes Tunisia and Morocco. It is carried out in cooperation with the Egypt National Cleaner Production Centre (ENCP) and the UN Industrial Development Organisation (UNIDO). According to Hanan El-Hadary, secretary of ENCP, the project touches 16 entities in Alexandria that lie in locations that have a direct environmental impact on the Mediterranean.
