AfDB outlook report indicates rise of African economy

Africa’s economic growth is expected to put up an impressive increase from 3.4 per cent in 2011 to 4.5 per cent in 2012 and to 4.8 per cent in 2013, an African Development Bank official said on Tuesday.Professor Mthuli Ncube, the chief economist and Vice President of the African Development Bank (AfDB), made the remark as he unveiled the African Economic Outlook report for 2012 in Johannesburg. “Sub-Saharan Africa’s growth is expected to rise from 5.1 per cent in 2011 to 5.3 per cent in 2012 and 5.4 per cent in 2013,” the AfDB chief economist said. “When South Africa is excluded, the rest of Sub-Sahara Africa grew at 5.9 per cent in 2011 and is expected to grow at 6.3 per cent in both 2012 and 2013,”he said.North Africa is also slowly returning to growth after falling to 0.5 per cent in 2011 owing to political volatility in the region. However, its growth is expected to recover at 3.1 per cent in 2012 before reaching 4.0 per cent in 2013. The continued recession in Europe remains a major threat to recovery in North Africa. The AfDB also projected positive regional growth prospects. The bank’s vice president said, “Southern Africa is set to grow from 3.5 per cent in2011 to 4.4 per cent in 2012 before landing at 4.4 per cent in 2013.”In West and Central Africa, the 2013 growth prospects will be slightly stifled. West Africa’s growth prospects are expected to fall from 6.9 per cent in 2012 to 6.4 per cent in 2013. Central Africa will be down from 4.9 per cent in 2012 to 4.8per cent in 2013. “The northern African country of Libya is expected to lead the top 10 fast-growing economies in Africa at 14.8 per cent in both 2012 and 2013,” Ncube said.Three Southern African countries are also in this list with the 2012 and 2013 growth prospects for Mozambique and Angola expected to reach 7.7 per cent each while Zambia follows them at 7.1 per cent. However, Egypt, Sudan and Tunisia will lead the top 10 slow growing economies in North Africa. Egypt and Tunisia, which are still dented by the effects of the Arab countries volatility, will grow at 1.8 per cent and 3.1 respectively. Sudan will do better than Egypt at 2.4 per cent.South Africa at 2.7 per cent growth prospect in 2012 and Swaziland’s 0.8 per cent are the only two Southern African countries in the top ten slow growing economies. “We identified that domestic consumer demand, macroeconomic policies and growth in sectors like mining, agriculture, services, construction and manufacturing are the internal drivers of growth in Africa,” said the AfDB Chief Economist. He said, “The external drivers of growth include commodity prices, export volumes, agricultural exports and external financial inflows”.However, the professor said Africa’s rising inflation and the increase in the world cereal prices remain big challenges stifling Africa’s growth prospects. The AfDB Chief Economist also noted that the debt crisis in Europe was also negatively affecting Africa’s growth. “Most countries in Europe no longer have much money to splash around since the Euro zone financial crisis started. The impact of this to Africa is that it has resulted in lower earnings from tourism and exports as well as lower financial inflows and this has impacted negatively on African banks,” he said.The AfDB suggested a number of measures that can be implemented to deal with the persistent developmental challenges in Africa. “Some of the measures include reducing infrastructure deficit, improving regional integration, promoting private sector and small and medium enterprises,” said the professor. The African Economic Outlook report was announced at a breakfast launch hosted by the Standard Bank of South Africa. “The African Economic Outlook demonstrates the economic rise of our continent. We now have all the reasons to believe that Africa’s economic development is not just a mere cyclical response to commodity demand in the rest of the world,” said Sim Tshabalala, Chief Executive Officer for the Standard Bank of South Africa. He praised Africa’s impressive growth for more than a decade and its resilience to the global recession.“Africa’s economic development has become increasingly self-sustaining,” Tshabalala said.