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Mineral wealth may hold key to bridging income gap

FINANCIAL STANDARD
By WINSLEY MASESE | Apr 29th 2014 | 2 min read
By WINSLEY MASESE | April 29th 2014
FINANCIAL STANDARD

By WINSLEY MASESE

NAIROBI, KENYA: Human capital development is expected to gather pace following sub-Saharan Africa’s improved economic performance prospects, according to a recent report by the International Monetary Fund.

Kenya is among the top-performing economies in the region and is expected to benefit from this forecast.

The IMF projects sub-Saharan Africa’s economic growth to accelerate to 5.5 per cent of Gross Domestic Product (GDP) this year, up from 4.9 per cent in 2013.

The report, titled Fostering Durable and Inclusive Growth, indicates that significant and widespread increases in per capita GDP in the continent’s countries have helped improve human development indicators.

“Improvements in human development partly reflect advances in health and education. Primary enrolment and completion rates show remarkable progress in line with developments in other developing countries,” it noted.

Countries that have experienced the largest increases in income and human development include those rich in mineral resources.

They include Angola, Ghana, and Mozambique, as well as countries that are not primarily commodity exporters, such as Ethiopia, Rwanda and Tanzania.

Released last week, the report adds that infant and maternal mortality rates have declined substantially in the region and have fallen faster than in other developing economies in the last decade.

The prevalence of undernourishment has also declined significantly. Higher access to clean water and sanitation across the region has helped improve health indicators.

What this means is that with Kenya making progress in mineral finds in places such as Turkana and the Coastal region, there exists the opportunity to increase investment in facilities such as health centres, schools and water supplies. This would ultimately improve residents’ capacity to contribute to economic development.

A report published by the Kenya National Bureau of Statistics and the Society for International Development last year found that because residents in marginalised areas like Turkana do not have adequate access to social amenities, secondary education levels are low. As a consequence, these residents find it harder to access jobs as compared to residents from better-developed regions, limiting their contribution to economic growth.

A report by the Asian Development Bank (ADB) attributed the impressive economic growth in the East Asian countries of China and South Korea to human capital developments, particularly in the areas of literacy and health.

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