Sub-Saharan Africa’s Economic Growth Rises to 5.2 percent

Sub-Saharan Africa’s economic growth is set to hit 5.2 per cent, up from 4.7 per cent, the World Bank has said.  “This performance is boosted by rising investment in natural resources and infrastructure, and strong household spending. Growth was notably buoyant in resource-rich countries, including Sierra Leone and the Democratic Republic of Congo,” noted the World Bank’s Africa’s Pulse report.

Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects, also indicated that non-resource-rich countries, particularly Ethiopia and Rwanda, experienced solid economic growth in 2013.  “Capital flows to sub-Saharan Africa (SSA) continued to rise, reaching an estimated 5.3 per cent of regional GDP in 2013, significantly above the developing-country average of 3.9 per cent,” added the report.

New oil and gas discoveries in Angola, Mozambique and Tanzania accounted for growth of 16 per cent in net foreign direct investment (FDI) in the region, to a near-record of 43 billion dollars in 2013.  “Remittances to the region grew 6.2 per cent to 32 billion dollars in 2013, exceeding the record of 30 billion dollars reached in 2011. These inflows combined with lower food prices, boosted household real incomes and spending,” said Africa’s Pulse.

The World Bank’s vice president for Africa, Makhtar Diop, said education could be critical and could dramatically increase the region’s effectiveness. “High-quality university programs in Africa, particularly in areas such as the applied sciences, technology and engineering, could dramatically increase the region’s competitiveness, productivity and growth,” said Diop.

However, Africa’s Pulse said that a number of risks remain, such as declining commodity prices due to weak demand, political uncertainty, price pressures due to droughts, and currency depreciation in countries like Ghana and Zambia.  “If Chinese demand – which accounts for about 45 per cent of total copper demand and a large share of global iron ore demand – remains weaker than in recent years, and supply continues to grow robustly, copper and iron ore prices could decline more sharply, with significant negative consequences for the metal-producing countries,” warned the World Bank.

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