After a day of upbeat comments on Monday, delegates attending the African Development Bank’s annual meeting are sounding a little more cautious on Tuesday, highlighting some of the big challenges that the continent needs to overcome.

For all the progress made over the last decade and a half, Africa remains poor and, often, hungry. Donald Kaberuka, the AfDB’s president, summarised the sentiment, telling delegates in Kigali, the capital of Rwanda: “You can not eat GDP.”

The AfDB on Monday forecasted economic growth across the region will accelerate this year to 4.8 per cent, from 3.9 per cent in 2013. Next year, it will increase to 5-6 per cent, “thus to levels last seen before the onset of the 2009 global recession”.

Violence in Africa is a key reason behind the note of caution. According to the AfDB, in 2012 – the latest available data – there were 13 armed conflicts across the continent, twice the number in 2005, when violence in Africa hit its lowest level since the end of the Cold War in 1989. Add to the figure of 2012 the current conflicts in South Sudan and the Central African Republic, and Islamist terror attacks in Nigeria and Kenya, and the outlook would sober even the most ardent “Africa Rising” enthusiast.

And yet, progress towards democracy remains unabated. In 2014-15, 600m Africans, including many first-time voters, will elect their leaders, the bank notes.

Another reason for the caution is intra-African trade – or, more properly, the lack of it.

The thriving business community in Africa still faces huge obstacles to trade and investment into other countries within the continent. According to the AfDB, African nationals need visas to get into at least two thirds of other African countries. And intra-African transport is not easy, either. “To get from the port of Mombasa to Kigali via Kampala, a lorry has to pay $864 in bribes and stop at 36 roadblocks,” the bank says.

And yet, there are signs of progress on the trade front too. Although commerce between African states remain comparatively low, it has been growing at an annual rate of 13.5 per cent since 2000. Intra-African trade was valued in 2012 at $81bn and has already overtaken Africa-US trade for the first time. Meanwhile, African-based companies accounted last year for nearly a quarter of all the foreign direct investment that the region received, in spite of visa problems.

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Related reading:
African bonds lose honeymoon feeling, FT
Foreign investment in Africa set to reach record, FT
Africa’s GDP is vastly understated, beyondbrics
The surge in Africa direct investment, beyondbrics

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