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Africa: Economic Growth

Volume 477: debated on Friday 20 June 2008

To ask the Secretary of State for International Development what the role of higher economic growth rates is in meeting the millennium development goals in Africa; and what recent steps he has taken to support the rate of economic growth in Africa. (211812)

Economic growth is essential for the achievement of the millennium development goals (MDGs). MDG 1, by definition, requires growth in the incomes of the poor. Sustainable achievement of the other MDGs requires African countries to generate the resources, through economic growth, to provide schools, hospitals, roads, sanitation and safe drinking water to their people.

Better infrastructure is a key constraint to faster growth in Africa. The Infrastructure Consortium for Africa is facilitating more effective infrastructure investment and there has been a 20 per cent. increase in investment since 2005. DFID increased its support to the Consortium secretariat in 2007. The Emerging Africa Infrastructure Facility (EAIF), which is supported by DFID, facilitates and leverages private sector financing. As of December 2007 the facility had loan commitments totalling $384.5 million (£192 million) in 15 projects. EAIF projects have led to private sector commitments of more than $4 billion (£2 billion). The government of Rwanda has asked DFID to help it with ‘Growth Analytics’, to prioritise actions to help get higher growth rates. This promising work has led other African countries to seek DFID's advice.

Further examples can be found in DFID's Annual Report, available at

www.dfid.gov.uk.

To ask the Secretary of State for International Development what the average rate of economic growth was in sub-Saharan Africa in the last three years; and what estimate he has made of the contribution of the UK to such economic development. (211818)

Economic growth in sub-Saharan Africa over the course of 2005-2007 averaged 6.3 per cent. per annum. The same figure for 1997-2002 was 4 per cent. This is encouraging, but growth is still below the 7 per cent. rate which is thought necessary to achieve the millennium development goals and there are concerns about the sustainability of growth in Africa.

UK aid is supporting economic development in a number of ways. For example, the Department for International Development (DFID) played a key role in the establishment and successful launch of the Investment Climate Facility (ICF) in 2006 to help strengthen Africa's business environment. Since then, ICF-funded projects have started in Rwanda, the East African Community, Lesotho, Liberia and Tanzania.

Better economic infrastructure (energy, transport, communications and water resources) is essential for faster growth. The Infrastructure Consortium for Africa is facilitating more effective infrastructure investment and there has been a substantial increase in investment since 2005. DFID increased its support to the Consortium secretariat in 2007. Further examples can be found in DFID's Annual Report, available at

www.dfid.gov.uk.