Sixty years on, Africa still seeks right model for growth

Lack of transparency and efficient judicial systems are major brakes on African growth, and wealth is concentrated in the hands of a few, say experts. (AFP/File)
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Updated 30 December 2019

Sixty years on, Africa still seeks right model for growth

  • The continent’s population is expected to double by 2050, led by Nigeria, Ethiopia and Democratic Republic of Congo

PARIS: As 1960 dawned, sub-Saharan Africa braced for historic change: That year, 17 of its countries were destined to gain independence from European colonial powers.
But six decades on, the continent is mired in many problems. It is struggling to build an economic model that encourages enduring growth, addresses poverty and provides a future for its youth.
Here are some of the key issues:
Africa’s population grew from 227 million in 1960 to more than 1 billion in 2018. More than 60 percent are aged under 25, according to the Brookings Institution, a US think tank.
“The most striking change for me is the increasing reality of disaffected youth ... a younger population that is ready to explode at any moment,” Cameroonian sociologist Francis Nyamnjoh told AFP.
“They are hungry for political freedoms, they are hungry for economic opportunities and they are hungry for social fulfilment.”
Joblessness is a major peril. Unemployed youths are an easy prey for armed groups.
The continent’s population is expected to double by 2050, led by Nigeria, Ethiopia and Democratic Republic of Congo.
The proportion of Africa’s population living below the poverty line — less than $1.90 per day — fell from 54.7 percent in 1990 to 41.4 percent in 2015, according to the World Bank.
But this average masks enormous differences from one country to another, exemplified by Gabon (3.4 percent of the population in 2017) and Madagascar (77.6 percent in 2012).
“The inequalities between countries are as extreme as in Asia and the inequalities within countries as as high as in Latin America, where landless peasants coexist with huge landowners,” said Togolese economist Kako Nubukpo.
Christophe Cottet, an economist at the French Development Agency (AFD), pointed out that inequality in Africa is “very poorly measured.”
“There are notably no figures on inequalities of inherited wealth, a key issue in Africa.”
Recent decades have seen the expansion of megacities like Lagos and Kinshasa, typically ringed by shantytowns where people live in extreme poverty, although many medium-sized cities have also grown.
More than 40 percent of Africans now live in urban areas, compared with 14.6 percent in 1960, according to the World Bank.


S&P 500 inches closer to record high

Updated 54 min 29 sec ago

S&P 500 inches closer to record high

  • US stock market index returns to levels last seen before the onset of coronavirus crisis

NEW YORK: The S&P 500 on Tuesday closed in on its February record high, returning to levels last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.

The benchmark index was about half a percent below its peak hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the US economy since the Great Depression.

Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second quarter earnings season have allowed all three of Wall Street’s main indexes to recover.

The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc., Netflix Inc. and Apple Inc. The index was down about 0.4 percent.

The blue chip Dow surged 1.2 percent, coming within 5 percent of its February peak.

“You’ve got to admit that this is a market that wants to go up, despite tensions between US-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.

“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”

Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval’s speed has concerned some experts as the vaccine still must complete final trials.

Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with US cases surpassing 5 million last week.

Also in focus are Sino-US tensions ahead of high-stakes trade talks in the coming weekend.

“Certainly the rhetoric from Washington has been negative with regards to China ... there’s plenty of things to worry about, but markets are really focused more on the very easy fiscal and monetary policies at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Financials, energy and industrial sectors, that have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday.

The S&P 500 was set to rise for the eighth straight session, its longest streak of gains since April 2019.

The S&P 500 was up 15.39 points, or 0.46 percent, at 3,375.86, about 18 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 341.41 points, or 1.23 percent, at 28,132.85, and the Nasdaq Composite was down 48.37 points, or 0.44 percent, at 10,919.99.

Royal Caribbean Group jumped 4.6 percent after it hinted at new safety measures aimed at getting sailing going again after months of cancellations. Peers Norwegian Cruise Line Holdings Ltd. and Carnival Corp. also rose.

US mall owner Simon Property Group Inc. gained 4.1 percent despite posting a disappointing second quarter profit, as its CEO expressed some hope over a recovery in retail as lockdown measures in some regions eased.

Advancing issues outnumbered decliners 3.44-to-1 on the NYSE and 1.44-to-1 on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and four new lows.