Peter Attard Montalto

When it comes to investing and doing business, Africa is no longer the impassable Dark Continent she used to be. Today, private enterprises and government organisations from all corners of the world seem to be after a slice of what the region has to offer.

To build on this momentum and stimulate further macroeconomic growth, African governments need to address the plethora of issues that exist at micro level.

Compared with the rest of the world, Africa is doing phenomenally well from a macroeconomic perspective. In January, for instance, the World Bank raised its forecast for economic growth in sub-Saharan Africa to 5.3% for 2011. If the region is to live up to the predictions, she will be the world's second best performer after south-east Asia (7.8%).

The 2011 growth predictions for the Organisation for Economic Co-operation and Development (OECD) region, on the other hand, are set at just below 3%.

The main ingredients for Africa's performance include its vast natural resources, the astonishing resilience the region has shown during the global crisis, and the continent's improved social and political stability.

"It is interesting to know that seven of the 10 fastest-growing economies will come from sub-Saharan Africa in the next five years," says Katherine Tweedie, head of the Africa World Economic Forum, in an online media statement, a week before the kick off of the meeting's 2011 edition.

The international event, which will take place in Cape Town from May 4-6, will to a great extent revolve around the drivers of Africa's growth spurt and the existing opportunities for growth and investment, but also the challenges that are ahead.

However, despite the progress at a macro level, the African sky is far from clear when observed from a micro and grass-roots angle. The continent, to a large extent, is still firmly stuck in a chronic state of underdevelopment, poverty, and socioeconomic inequality.

Despite the predicted economic growth, nearly half of the 840 million people living in sub-Saharan Africa have to survive off US$1.25 per day or less.

This situation translates into other problems, such as hunger. According to the United Nations (UN) Food and Agricultural Organisation (FAO), 240 million people living in African countries south of the Sahara are chronically undernourished.

To work towards a better future, African governments have to take the bull by the horns. The World Economic Forum therefore advises authorities across the region to improve the collection of taxes and to more efficiently and effectively spend these funds. This also counts for donor funds, loans and investment money.

Areas that need urgent attention include infrastructure, healthcare, education and job-creation programmes.

Governments are also advised to empower small and medium enterprises, which are the main creators of employment, thus income generators across the continent.

In addition, African states should join hands with each other as well as the private sector, stresses Peter Attard Montalto, emerging markets economist at Nomura International.

"There is the ever-present issue of untapped potential and as such a key priority will have to be the inter-linkage of the private and public sectors to drive growth," he says. "Individual countries in Africa also need to join hands with each other instead of operating alone when it comes to fighting poverty and generating economic growth. Countries on their own have only so much power. Part of the issue here is infrastructure, and part is politics and foreign economic policy.

"African governments also need to drop trade barriers and duties within Africa, improve infrastructure and allow the private sector to do the rest", says Montalto, adding that African countries should boost the trade with their African counterparts instead of focusing on the outside world.

According to the World Bank, the level of intra-continental trade in Africa remains among the lowest in the world. Just 10% of all African trade is taking place within the continent.

"Providing these foundations would help unlocking an awful lot of private sector interest, which up until now has shied away from doing business in Africa," he adds.

"What Africa does not need are new and more regional trade bodies and regulations. The region does not need more talk shops, as it already has those institutions. What the region needs to do is strengthen them and make them more effective."