Sustaining business growth in Africa
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Doug Krizner: Treasury Secretary Hank Paulson is in Ghana today, his last stop in a five-day trip across Africa. Paulson said he didn’t want the visit to be about financial aid, but business.
Trade between the U.S. and Africa jumped 17 percent last year, mostly in raw materials like crude oil, copper and timber. Gretchen Wilson reports from Johannesburg.
Gretchen Wilson: Economies in sub-Saharan Africa are growing at 5, 6, sometimes 7 percent a year. Recent comments by the IMF and World Bank suggest these increases can be sustained.
Jeff Gable is head of research at ABSA Capital in Johannesburg:
Jeff Gable: And that’s tremendously helpful, because that’s the level of growth rate that you need in order to generate significant income in these countries and an opportunity to alleviate poverty in a meaningful way.
This is why Treasury Secretary Paulson says aid alone won’t drive sustainable growth. Instead, he says Africa’s success depends on changes that make businesses more willing to invest. These include sound fiscal and monetary policies, transparency and the rule of law.
He says U.S. assistance is earmarked for countries that have made similar market reforms. The hope is that by giving aid to countries like Lesotho and Tanzania to open markets, the wealth their markets generate will be spread more fairly.
In Johannesburg, I’m Gretchen Wilson for Marketplace.
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All reporting by Gretchen L. Wilson, © 2007
