JOHANNESBURG: Countries like Angola and Equatorial Guinea should be in a headlong rush to affluence — at least that’s how it’s supposed to look on paper. Sub-Saharan Africa’s second and third biggest oil producers have seen the kind of huge growth and investment that ought to translate into rising living standards for people in both countries, according to conventional wisdom.

Try telling that to the Angolan slum-dweller or the shoeless peasant in Equatorial Guinea, whose prospects for relief continue to be blighted by what experts say is an appalling lack of governance and a chronic dependence on commodities. Africa’s particular difficulties have been highlighted in a recent University of Cape Town study, which found that economic growth in Africa has not been as effective at reducing poverty as similar growth has been in Asia.

“It is evident that for the same given level of growth, sub-Saharan Africa has been less able to alleviate poverty than East Asia and the Pacific region,” the study said. Analysts say this highlights the fact that investment and growth are not magic bullets. They require some aftercare.

“You have to be serious about the knock-on affects of investment if you want to have development,” said John Stremlau, the head of the International Relations Department at Johannesburg’s University of the Witwatersrand. “It’s the qualitative not just the quantitative issues.”

The alchemy of transforming growth and investment into profits and poverty relief in Africa will be on the minds of global business leaders this week in Cape Town at the World Economic Forum (WEF) and later in July Africa is expected to be high on the agenda when the G8 industrial powers meet.

When big business, Western leaders and the experts talk about Africa on these occasions, they will look at ways to boost investment, fight poverty, help people — and examine cases to study the good, the bad and the ugly ways of doing so.

In 2003, Equatorial Guinea was the second-largest recipient of foreign direct investment in Africa, sucking in $1.3 billion versus about $300 million in 2002, according to the UN’s World Investment Report.

Oil-soaked Angola, Sudan and Nigeria were third, fourth and fifth respectively. The growth figures are also impressive.

Equatorial Guinea’s economy surged 34 per cent last year as energy prices soared, but the windfall had little impact on poverty in the tiny west African country, the International Monetary Fund said in a recent annual review.

“Unfortunately, the country’s oil and gas wealth has not yet led to a measurable improvement in living conditions for the majority of the population,” the global lender said.

Angola’s economy is expected to grow 14.4 per cent in 2005, up from 13.6 per cent last year, thanks to high oil prices and foreign investment in its energy sector, the US government’s energy forecasting agency said in January.

South Africa has had moderate economic success and could provide a model for the rest of the continent to go by. It has Africa’s largest, most diverse economy and boasts a democratic and transparent government. South Africa’s economy grew by 3.7 per cent last year and one independent survey says it had net job growth in its formal, non-farm sector of over 2.0 per cent during the same period.

That same survey says the country’s economy only began creating jobs on a net basis in 2002, after a decade of steep job losses as the economy underwent wrenching change. Some analysts say that to really reduce poverty, South Africa should attempt to channel money into labour-intensive sectors like construction rather than seek faster growth.—Reuters