The African Development Bank (ADB) says the continent’s economy is set to rebound from the global financial crisis, with 80 percent of African economies expected to grow this year.
The ADB recently held its annual general meeting in the Ivory Coast capital, Abidjan where there had been political tensions surrounding the much delayed presidential elections. The ADB officials say real gross domestic product on the continent is expected to reach 4.5 percent this year, well above the global average.
“Growth could top five percent by 2011, putting African economies back on a 10 year track that was disrupted by last year’s global economic crisis. But the recovery will be uneven,” economic think tanks said.
According to the ADB, Southern Africa was hardest hit by the financial crisis and it will take longer to rebound. However, East Africa best weathered the global financial crisis and will likely achieve the highest average growth, in the next year, “a region that has been plagued by drought and political unrest over the period.”
Information gathered from Abidjan also has it that foreign donors have widely praised African Development Bank’s efforts to soften the impact of the financial crisis by more than doubling concessionary lending, which has led donors to triple their capital base to $100 billion.
Speaking at the meeting, the Bank’s President Donald Kaberuka told economic experts that the extra money will go into infrastructure and power. “It’s timely, it’s a vote of confidence in Africa,” Kaberuka said.
He said: “I think it will give us enough firepower for now to provide the kind of response that we need to meet some of these structural concerns which are mainly, around infrastructure.”
He also unveiled that new power projects include a wind farm in Northern Kenya, several hydroelectric programs and coal and gas-powered plants.
“There’s no way this continent can grow, living on energy less than Spain,” Kaberuka argued.
The Bank’s Governor Antoine Bohoun Bouabre stressed that security is a priority, as the Bank’s headquarters remain in Ivory Coast. Bouabre says; ‘now that security has been restored, the bank and Africa have entrusted Ivory Coast to keep its headquarters here. He says it is a responsibility for the government of Ivory Coast to fulfill its duty.
African Development Bank officials said stability in the financial sector has been key to weathering the global economic crisis. They point to Nigeria’s Central Bank buying-up non-performing loans at 10 failing banks then establishing an asset management corporation to help recapitalize those banks so they will be able to repay part of the bail-out.
The bank also said African governments can promote growth by adopting sustainable fiscal policies that increase tax revenue by encouraging investment. It says broader use of a new generation of information and communication technology can overcome long-standing infrastructure weaknesses and reduce the cost of doing business.