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Kai Ryssdal: There was a grim assessment from the African Development Bank today — that the rate of economic growth will fall by more than half this year on the world’s poorest continent. That could mean a real crisis, as Marketplace’s Stephen Beard reports.
STEPHEN BEARD: Africa has been hit hard, the bank says. It’s not that the continent, as a whole, is in recession. But it’s seen a sharp fall in the rate of growth. Per capita income is expected to increase by only 2 percent or so in 2009, the lowest level for 15 years. Patrick Smith, editor of Africa Confidential Magazine.
PATRICK SMITH: It’s due almost entirely to the failure of the markets in the West. Those are the markets for Africa’s key export commodities, both the agricultural commodities and the oil and gas and mineral exports.
Over the past decade the African economy has grown at around 5 percent a year, thanks to the booming demand for commodities and to a general improvement in economic management. That could be in jeopardy, says Todd Moss of the Centre for Global Development:
TODD MOSS: The long-term issue is whether Africa is going to turn its back on some of the economic reforms that were the basis of the positive performance more recently.
The downturn poses a political and social threat says Patrick Smith. The collapse in the price of commodities could deprive every African of $250 a year of income, a catastrophic decline in some countries.
SMITH: There are some economies where the average per capita income per head is well under $500 a year. So you’re looking at a substantial problem looming in Africa.
He says that problem may only be averted, if the global economy begins to recover early next year.
In London, this is Stephen Beard for Marketplace.