WASHINGTON, April 15, 2013–Economic
growth in Sub-Saharan Africa is likely to reach more than 5 per cent on
average in 2013-2015 as a result of high commodity prices worldwide and strong
consumer spending on the continent, ensuring that the region remains
amongst the fastest growing in the world -- according to the World Bank’s latest Africa’s Pulse, a twice-yearly
analysis of the issues shaping Africa’s economic prospects.
In 2012, about a quarter of African countries
grew at 7 percent or higher and a number of African countries, notably Sierra
Leone, Niger, Cote d’Ivoire, Liberia, Ethiopia, Burkina Faso and Rwanda, are
among the fastest growing in the world.
The new World Bank report forecasts
that medium-term growth prospects remain strong and will be supported by a
gradually improving world economy, consistently high commodity prices, and more
investment in regional infrastructure, trade, and business growth.
Welcoming
the new assessment that Africa continues to grow faster than the global
average, the World Bank’s Vice President called on the need for faster progress
in areas such as electricity and food in the vulnerable areas of The Sahel and
the Horn of Africa, and that significantly more energy and agricultural
productivity were needed to raise the quality of life for Africans throughout
the continent and reduce poverty significantly.
“African countries
will need to bring more electricity, nutritious food, jobs and opportunity to
families and communities across the continent in order to better their lives,
end extreme poverty, and promote shared prosperity,” said the World Bank’s Africa Vice President Makhtar
Diop. “Without more electricity and
higher agricultural productivity, Africa’s development future cannot prosper.
The good news is that governments in Africa are intent on changing this.”
Diop also urged African governments and
their development partners to upgrade the continent’s statistical capacity so
that citizens could better measure and monitor their development progress and
analyze the reasons for its success and failure, especially in resource-rich
countries and fragile states, where data gathering and analysis remained weak.
New mineral discoveries drive growth
Africa’s
Pulse
says that recent
discoveries of oil, natural gas, copper, and other strategic minerals, andthe
expansion of several mines or the buildingof new ones in Mozambique, Niger,
Sierra Leone, and Zambia, together with better political and economic
governance,were sustaining solid economic growth across the continent.
Looking forward, it is expected that by
2020, only 4 or 5 countries in the region will not be involved in mineral
exploitation of some kind, such is Africa’s abundance of natural resources.
The World Bank says that given the
considerable amounts of new mineral revenues coming on stream across the
region, resource-rich African countries will
consciously need to invest these new earnings in better health, education, and
jobs, and less poverty for their people in order to maximize their national
development prospects.
Consumer
spending and private investment up
Consumer
spending, which accounts for more than 60 per cent of Africa’s GDP, remained
strong in 2012.
This
trend was driven by declining inflation, which fell from 9.5 percent in January
2012 to 7.6 percent in December 2012; improved access to credit, for example in
Angola, Ghana, Mozambique, South Africa, and Zambia; lower interest rates--for
every interest rate hike there were three cuts; and a rebound in agricultural
incomes, thanks to more favorable weather conditions in countries such as
Guinea, Mauritania and Niger, which all experienced better rains compared with
the 2010/2011 crop year; and the steady remittance inflows, which are estimated
at $31 billion in 2012 and 2011.
Increased investment
flows are supporting the region’s growth performance. In 2012, for example, net
private capital flows to the region increased by 3.3 percent to a record $54.5
billion; and foreign direct investment
inflows to the region increased by 5.5 percent in 2012 to $37.7 billion.
Africa’s Pulse notes
that exports are also driving the continent’s growth and that the traditional
destination of these goods over the last decade is changing as well. Since
2000, the overall growth of Sub-Saharan exports to emerging markets, including
those of China, Brazil and India, and to countries in the region has surpassed
that to developed markets. Total exports to Brazil, India and China were larger
than to the EU market in 2011.
Africa’s impressive growth has not reduced poverty enough
After
more than a decade of strong economic growth, the World Bank says that Africa
has been able to cut poverty on the continent, but not by enough.
“While the broad picture emerging from the data is that
Africa’s economies have been expanding robustly and that poverty is coming
down, the aggregate hides a great deal of diversity in performance, even among
Africa’s faster growers,” says Shanta Devarajan, the
World Bank’s Chief Economist for Africa, and lead author of the new report.
Devarajan adds that during the second
half of the 2000s, Ethiopia and Rwanda saw their economies expand at 8-10
percent (or between 5 and8 percent per capita), which resulted in a 1.3 to 1.7
percentage point yearly fall in their national poverty rates. In contrast,
poverty reduction in some other countries has lagged far behind growth.
Future offers
prospects of more growth, much less poverty, and shared prosperity
Africa’s Pulse suggests that a
number of emerging trends on the continent could help to transform its current
state of development over the coming years. These include the promise of large
revenues from mineral exploitation, rising incomes created by a dramatic
expansion of agricultural productivity, the large-scale migration of people
from the countryside into Africa’s towns and cities, and a demographic dividend
potentially created by Africa’s fast-growing population of young people
.
“If properly
harnessed to unleash their full potential, these trends hold the promise of
more growth, much less poverty, and accelerating shared prosperity for African
countries in the foreseeable future,” says Punam Chuhan-Pole, a co-author
of the Africa’s Pulse and a Lead Economist in the World Bank’s Africa
region.
Contacts:
In Washington: Phil Hay +1 (202)
473-1796 and cell +1 (202) 409-2909, phay@worldbank.org
AbyToure +1 (202) 473-8302, Akonate@worldbank.org
Read the full report
here:
Visit the Africa
Pulse Page here: www.worldbank.org/africaspulse
And to see more on
the World Bank’s development work in Africa, please visit:
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News Release
2013/332/AFR
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