Sub-Saharan Africa’s economy to expand at least 5% in next three years – World Bank

The World Bank is predicting at least a 5% economic growth on average for sub-Saharan Africa in 2013-2015.

This will be as a result of commodity prices worldwide and strong consumer spending in Africa which will ensure the region remains amongst the fastest growing in the world, the World Bank said in its Africa’s Pulse report released April 15, 2013.

The report is a twice-yearly analysis of the issues shaping Africa’s economic prospects.

The new World Bank report forecast 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.

According to the Bank, about a quarter of African countries in 2012, grew at 7% 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.

Consumer spending, which accounts for more than 60% of Africa’s GDP, remained strong in 2012, according to the report. It says “This trend was driven by declining inflation, which fell from 9.5% in January 2012 to 7.6% 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 favourable 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 2011 and 2012.”

As Africa continues to grow faster than the global average, the World Bank’s Vice President for Africa, Makhtar Diop calls for faster progress in areas such as electricity and food in the vulnerable areas of The Sahel and the Horn of Africa.

Mr Diop was of the view that more energy and agricultural productivity were needed significantly 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 Makhtar Diop.

But despite Africa’s impressive growth, the World Bank indicates that the growth has not reduced poverty 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,” said Shanta Devarajan, the World Bank’s Chief Economist for Africa, and lead author of the new report.

The Africa Pulse report suggests that a number of emerging trends on the continent could help to transform its current state of development over the coming years. It mentioned  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.

By Ekow Quandzie