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September 02, 2009

Technology and Economic Growth Enter Into the Heart of Scarcity

Africa Has Had About 6% Annual GDP Growth and 3% per Capita GDP Growth Since 2001




In 2009, the economic crisis has hurt growth but much of Africa is heading back to 4-5% growth in 2010 and probably back to 6% growth in 2011 onwards.

Economic Growth Has Had a Positive Impact on Poverty Reduction and Other UN Millenium Goals



The UN millenium goals report for 2009, shows solid progress. 2009 saw slowing of progress and some backsliding because of the financial crisis.

A mid2009 UN report shows that GDP growth in the 2-5.5% is expected in Africa in 2010.

The IMF raised its GDP growth expectations in July 2009.

The African and middle east economies have performed relatively well in this crisis.

Africa                            1.8  4.1  
Emerging and developing economies 1.5  4.7   

Wikipedia list of countries by future nominal GDP per capita (from the IMF) shows solid growth for most of the poorest nations.

Africa's total population is about 1 billion. The ten largest countries have about two thirds of the population.

Country        2009   2010  2011  2012  2013  2014   Population 
Nigeria      1,108 1,200 1,264 1,334 1,405 1,480    155 million
Ethiopia       427   442   459   475   500   538     85 million
Egypt        2,456 2,610 2,860 3,130 3,337 3,634     81 million
Congo          173   182   194   205   220   246     66 million
South Africa  4,943 5,014 5,207 5,456 5,744 6,031     49 million
Tanzania        538   568   600   643   690   740     44 million
Sudan         1,334 1,511 1,690 1,847 2,026 2,160     42 million
Kenya           829   993 1,148 1,256 1,356 1,474     40 million
Algeria       3,640 4,064 4,357 4,630 4,893 5,073     35 million
Morocco       2,655 2,802 2,991 3,211 3,449 3,689     32 million



List of African countries by population


Africa is Getting Some Technology and the Tech is Improving Lives
Foreign Policy: Thing Again Africa's Crisis Africa, the continent is in far better shape than most experts think.

Some countries in the region are as poor as England under William the Conqueror, but that doesn't mean Africa's on the verge of doomsday. How many serfs had a cellphone? More than 63 million Nigerians do. Millions travel on buses and trucks across the continent each year, even if the average African road is still fairly bumpy. The list of modern technologies now ubiquitous in the region also includes cement, corrugated iron, steel wire, piping, plastic sheeting and containers, synthetic and cheap cotton clothing, rubber-soled shoes, bicycles, butane, paraffin candles, pens, paper, books, radios, televisions, vaccines, antibiotics, and bed nets.

The spread of these technologies has helped expand economies, improve quality of life, and extend health. About 10 percent of infants die in their first year of life in Africa -- still shockingly high, but considerably lower than the European average less than 100 years ago, let alone 800 years past. And about two thirds of Africans are literate -- a level achieved in Spain only in the 1920s.

Thanks to the spread of technologies and new ideas, African economies are expanding fast and population growth has been accompanied by better health. The continent of Africa has seen output expand 6½ times between 1950 and 2001. Of course, the population has grown nearly fourfold, so GDP per capita has only increased 67 percent

Some widespread health conditions in the region -- notably HIV/AIDS -- are still expensive to treat. But the most effective interventions for promoting health in Africa are remarkably cheap. Breast-feeding, hand-washing, sugar-salt solutions, vaccines, antibiotics, and bed nets together save millions -- and could save millions more -- and none need cost more than $5 a pop. Rollout of a vaccination program, for example, has slashed annual measles deaths in the region from 396,000 to 36,000 in just six years. And though Chad isn't going to see universal college enrollment anytime soon, some very poor countries have already achieved near-universal primary education based in large part on free schooling.

A lot of aid to Africa is wasted, and some goes to support silly ideas or countries that can't use it well. But aid has also supported some programs that have made a real difference in quality of life -- things like supporting the measles vaccination program, helping to eradicate smallpox, fighting river blindness, funding educational radio programs, building sewage networks, and providing scholarships so that poor children can afford to stay in school


Cellphones Can be Cheaper than Clean Water and Sanitation

There is clearly a need for clean water and sanitation.

In 2003, 1.6 million deaths were estimated to be attributable to unsafe water and sanitation, including lack of hygiene; 90% of this burden is concentrated on children under five, mostly in developing countries. In spite of the considerable investment in the provision of water supply and sanitation in the 1980s and 1990s, in 2000 a significant proportion of the world’s population remained without access: an estimated 1.1 billion people were without access to improved water sources and 2.4 billion people lacked access to improved sanitation. Expanding this access is essential to reduce the burden of water-related diseases and to improve the well-being of a large part of the world's population.


Clear dirty water is a serious problem but it usually does not kill people right away. It makes people sick and causes a percentage of deaths of children and the elderly. But clean water and sanitation projects tend to be large infrastructure spending efforts. The overall problem would need $25 billion/year for improved water and sanitation for all who currently need it and then about $150 billion/year for real infrastructure fix. Those numbers are for thousands of mostly million dollar and multi-million dollar projects across a hundred countries and dozens of projects in each country.

Cellphones are bought by individuals and can help connect people to finance and banking and helps with irrigation and farming with weather reports and connection to information. There is immediate financial gain by better access to markets, savings in time (do not need to travel someplace -you can just call) and allows for business opportunities. The rollout of cellphone networks by providers is far cheaper than the rollout of water/sanitation infrastructure and the economics for the providers is far better.

Africa: Cellphones Tipped to Drive Growth in Poor Nations

The mobility, ease of use, flexible deployment, and relatively low and declining roll-out costs of wireless technologies enable them to reach rural populations with low levels of income and literacy.

The report says the next billion mobile subscribers will consist mainly of the rural poor.

An important use of mobile phones in rural areas is to access market information.

TradeNet, a Ghana-based trading platform, allows users to sign up for SMS alerts about commodities and markets while receiving instant alerts for offers to buy or sell when anyone else on the network has submitted an offer.


Read more on the transformative benefits of cellphones in Africa:
Cellphones lower cost of irrigation

Cellphones support access to clean water

Africa: Cell Phones Transform Continent's Development

Cellphones enable a financial revolution in Africa

Getting cellphones to rural Africa is a challenge and there are ingenius solutions.

Millenium village projects to solve poverty and other problems in Africa and other poor regions.

Conclusions

1. Africa is growing fairly fast now and has been for a decade. This could be the beginning of a multi-decade journey like the one in Asia to prosperity for the region.

2. Technology like cellphones or new technology that is emerging that costs less than $50-100/year per person and can be rolled out in smaller overall project sizes and with faster project return on investment will have a faster distribution than clean water and sanitation projects.

3. There are still plenty of super-cheap per person assistance to be done by the people themselves or with international aid that can save many millions of lives and improve quality of life.

4. Technology is a major force in ending extreme poverty.

2008 GDP statistics
East Asia & Pacific 5,186,610
Europe & Central Asia 3,860,600
Latin America & Caribbean 4,247,077

Middle East & North Africa 1,117,198
About 400 million people in Middle East and North Africa

Sub-Saharan Africa 987,120
Sub-saharan Africa has 800 million people The population is projected to grow to 1.5-2 billion in 2050.

India has 1.2 billion people and a GDP of 1.2 trillion. So collectively Africa is ahead of India. Sub-saharan Africa is economically similar to the most of India.

Sub-saharan Africa could follow fairly closely behind India's development of 6-8% annual GDP growth, but per-capita GDP it will be about 20-50% slower to improve because of higher population growth rates.

South Asia 1,531,499
High income 43,189,942
Euro area 13,565,479

Some recommendations on policy that will encourage a faster recovery in Africa

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