Gearing Up for Growth - Reducing Poverty Part One - By: Lars Stork

In 2008 The African continent was seeing its strongest economic growth since the 1970s. 15 African countries entered a second decade in which they posted strong annual economic growth rate of above 5%. Despite strong economic performance, Sub-Saharan Africa remains the only region not on track for achieving the Millennium Development Goals by 2015. In 2009 recession has hit Sub-Saharan Africa, export demand is collapsing and commodity prices- in particular those of oil and base metals-under pressure, real GDP growth in numerous sub-Saharan African countries is likely to end up in negative territory.

There is not a single country in sub Saharan Africa that I have visited, through my work, where I have not come across a teaming number of people who are unable to make ends meet. There are millions of people both in urban and rural areas who can barely have a meal a day let alone afford decent clothes to put on. If they live in urban areas, they live in slums. The available infrastructure is scanty. For instance, to go through daily ablutions is a real humiliation. In the rural areas, the majority of the people live in mud and thatched roof shelters-most of them cannot even be described as houses. Children born in this environment are likely to have serious health problems.

The persistent poverty across sub Saharan Africa represents a real challenge. All key stakeholders must come together being it Local Governments, private industries, world bank etc. focusing on infrastructure projects and new business development leading to significant job and value creation. It is entirely possible to reduce if not, eliminate poverty within our midst. It particular requires men and women in government who are committed and are willing to come out with sensible poverty alleviation strategies that are sustainable. Africans themselves, especially those who have had the good fortune to acquire skills that enable them to have a decent quality of life both in country and off shore must also do more to engage and take on the collective challenge and help a continued elimination of poverty.

The telecoms industry in particular is a sterling example of how business can facilitate social and economic progress in underdeveloped countries. Independent research shows that, in developing countries, increasing access and provision of mobile phones increases GDP per capita growth by 0.6 per cent per annum. There is a direct and unquestioned correlation between increased mobile phone penetration and increased macro- and micro-economic development; a Deloitte study found that where mobile penetration increased by 10%, GDP is uplifted by 1.2% (2007). More broadly, mobile phones also promote entrepreneurship and economic activity by widening access to markets and compensating for poor or nonexistent transport infrastructure, supporting social and economic progress. The contribution the telecoms industry is making in terms of employment is also significant. Thousands of people are directly or indirectly employed by Africa’s mobile providers, earning their living reselling prepaid airtime. The role of business in facilitating social and economic progress isn’t limited to job and wealth creation; companies can play a significant role in driving technological advancement.

About the Author

FutureAfrica is a consultancy firm that offers business consulting services such as essential business process modeling, organizational transformation, people development and more.

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