Business
Africa to maintain solid growth in 2013 and 2014 – IMF
The changing fortunes of Africa has become a theme of investment conferences, magazine covers, and the just concluded summit of the BRICS (Brazil, Russia, India, China and South Africa) bloc of emerging economies held in Durban, South Africa.
Economies in sub-Saharan Africa will ride out the bumpy global recovery in the next few years to post growth rates not seen outside Asia, the International Monetary Fund (IMF) said in its latest economic forecasts Tuesday.
The IMF’s latest World Economic Outlook predicted economic activity in Africa’s reinvigorated economies will “remain robust” in 2013 and 2014.
Regional gross domestic product (GDP) is expected to increase 5.6 percent in 2013, slightly lower than previously expected, but still among the fastest rates seen anywhere in the world.
Resource-rich economies like Nigeria – (Africa’s top oil producer) will attain growth of over 7 percent; Mozambique – (which has become on of Africa’s main natural gas producers) will attain growth of 8.4 percent – are expected to lead the way.
Only two countries, Swaziland and Equatorial Guinea are expected to see their economies shrink.
In 2014, an economic resurgence in South Africa — the regional powerhouse — is expected to push sub-Saharan growth to around 6.1 percent, faster than originally thought.
The South African economy, hobbled this year and last by “sluggish mining production” and a downturn in key eurozone export markets, is forecast to grow at 3.3 percent in 2014.
In 2012 South Africa was rocked by a series of labor strikes, which mine owners estimated cost the economy around US$1.2 billion.
The IMF admits that the regional outlook for 2014 depends on improvements in the economic outlook for Europe and other key export markets.
It warns that some African economies remain vulnerable to external shocks – such as lower Chinese growth figures negatively impact gold prices and potentially other commodities.
“The main risks to the outlook for sub-Saharan Africa stem from the external environment, although domestic security and political risks should not be discounted,” the report stated.
“On the positive side, Angolan oil production strengthened, and Ivory Coast experienced a sharp rebound in economic activity after the election-related disruptions of 2011.”
The IMF encouraged a continuation of spending to improve infrastructure and boost production capacity, both of which have helped fuel the rise of African consumers.
On average urban Africans already spend more on apparel and food than those in Brazil, China and India, according to a recent McKinsey & Company study.
While the price of basic goods continues to increase in many African nations, particularly oil producers Nigeria and Angola, the IMF urged others to take advantage of moderate inflation.
“The success in reducing inflation has provided room for a gradual easing of the monetary policy stance in several countries,” it said.
Sources: AFP and IMF