ADDIS ABABA, June 4 (AFP) - African economies will benefit from slightly increased growth this year, as long as recovery takes hold in developed countries, oil prices fall and droughts ease, the African Development Bank (AfDB) said in a report published Wednesday.
The 2003 edition of the African Development Report, which was released during the annual meetings of the AfDB in Addis Ababa, forecast economic growth of 3.3 percent this year in Africa.
The continent's real gross domestic product (GDP) growth for 2002 was 2.8 percent, down from 3.5 percent the previous year, it said.
Despite the improvement, the rate falls short of the seven percent growth per year which is widely accepted as necessary for the Africa to meet the United Nation's millennium development goals of slashing absolute poverty by 2015.
"Growth of the world economy is expected to be moderate, buoyed by gradual recovery in industrial countries and Latin America," the report said.
"This increased aggregate demand will significantly increase Africa's external impetus for growth by impacting on both the volume and prices of major exports, as well as continuing to affect capital flows," it added.
Lower oil prices would leave African importers with more cash to invest in infrastructure and agriculture, the improvement of which is critical to reducing poverty and increasing production and competitiveness.
The AfDB said improved growth in Africa also depended on better weather. Drought in the south of the continent and in the Horn of Africa this year have not only slashed output, but also left millions of people dependent on emergency food aid.
The cessation of conflicts in parts of Africa, especially in the Democratic Republic of Congo (DRC), Angola and Ethiopia-Eritrea, and the prospects of significant post-conflict reconstruction programmes give the hope of possible peace dividends, the report said.
The war in DRC may be over on paper, and a transitional power-sharing government in the offing, but fighting continues in much of the east of the vast country, especially in Ituri region, where inter-ethnic killings have prompted the deployment of a major international emergency peacekeeping force, led by France.
The report was also optimistic about the change of government brought about in Kenya after elections in December 2002, when an opposition alliance dealt a crushing defeat to the party that had been in power for almost 40 years.
The AfDB was careful to stress that several eventualities would prevent any improvement in Africa's economy.
There is the risk of continuing shocks and uncertainties in the international financial system, the report warned.
It is also possible that the drought in parts of Africa would not cease, it added, going on to emphasize the importance of political stability in the wake of Nigeria's presidential election.
The report stressed the need for sustained and deepening reform, going beyond political governance and institutional reforms, to a broad economic agenda concerning micro- and macro-economic policies, it said.
But Africa cannot do it alone.
Some of the challenges and risks to the medium term performance -- disease, civil strife, poor governance in several countries, the HIV/AIDS pandemic, lack of economic diversification, trade shocks, low savings and investment, dependence on foreign aid and so on -- will not easily be solved through domestic reforms, the report said.
The international community must act in concert to lift the poorest regions of Africa from poverty, it stressed.
The challenge facing Africa is not so much how to overcome some short term cyclical trends. Rather it is how to overcome the poverty trap and lay a solid foundation for a virtuous circle of growth and development, the report said.
The AfDB gave two figures in its report -- 3.3 and 3.6 percent -- for Africa's growth estimate. But banking sources said the correct figure is 3.3 percent for 2003.
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