Sub-Saharan Africa is expected to grow at 4.8
percent in 2012, broadly unchanged from the 4.9 percent growth rate in 2011 and
largely on track despite setbacks in the global economy, according to the World
Bank’s new Africa’s Pulse, a twice-yearly analysis of the issues shaping
Africa’s economic prospects.
Excluding South Africa, the continent’s largest
economy, growth in Sub-Saharan Africa is forecast to rise to 6 percent. African
exports rebounded notably in the first quarter of 2012, growing at an
annualized pace of 32 percent, up from the -11 percent pace recorded in the
last quarter of 2011.
African countries have not been immune to the recent
bout of market volatility stemming from the Euro Area crisis, as well as the
growth slowdown that is occurring in some of the largest developing economies,
in particular China, which remains an important market for Africa’s mineral
exporters.
However, consistently high commodity prices and
strong export growth in those countries which have made mineral discoveries in
recent years, have fuelled economic activity and are expected to underpin
Africa’s economic growth for the rest of 2012.
“A third of African countries will grow at or above
6 percent with some of the fastest growing ones buoyed by new mineral exports
such as iron ore in Sierra Leone and uranium and oil in Niger, and by factors
such as the return to peace in Cote d’Ivoire, as well as strong growth in
countries such as Ethiopia,” said World Bank Vice-President for Africa, Makhtar
Diop. “An important indicator of how Africa is on the move is that investor
interest in the region remains strong, with $31 billion in foreign direct
investment flows expected this year, despite difficult global conditions.”
With the global economy still in fragile condition,
Africa’s Pulse warns that Africa’s strong growth rates could yet be vulnerable
to deteriorating market conditions in the Euro-zone. In addition, recent spikes
in food and grain prices are a cause for concern. An unprecedented hot and dry
summer in the United States, Russia and Eastern Europe led to reduced yields on
both maize and wheat production worldwide. Africa’s Sahel region is already
suffering from higher food prices, high rates of malnutrition and recurring
crisis and insecurity.
Furthermore, swarms of desert locusts and the
ongoing conflict in The Sahel also undermine the region’s food security.
Countries like Mali and Niger are already suffering from locust invasions with
a possibility that the swarm could move to neighboring countries such as
Mauritania and Chad. This would aggravate the ability of families to find
enough to eat in a region already grappling with drought and conflict.
New
mineral wealth on the rise
According to the latest Africa’s Pulse, new
discoveries of oil, gas, and other minerals in African countries will generate
a wave of significant mineral wealth in the region, and that the economic
importance of natural resources is likely to continue in the medium term in
several established oil and mineral producers, thanks to the sizeable stock of
resource wealth and the prospects of continued, high commodity prices.
The region’s established oil producers represent
less than 10 percent of the share of global reserves as well as annual
production. Nigeria, the largest regional producer, can keep supplying at 2011
levels for another 41 years, while Angola, the second largest producer in the
region, has about 21 years remaining at current production levels before its
known reserves are depleted.
Given the size of these reserves, it is likely that
the dependence on oil resources in these countries is likely to continue in the
near to medium term. Production in new mineral countries such as Ghana,
Mozambique, Sierra Leone and Uganda could last for a substantial number of
years as well.
African countries share in global reserves and
annual production of some minerals is sizeable. In 2010, Guinea alone
represented over 8 percent of total world bauxite production; Zambia and the
Democratic Republic Congo have a combined share of 6.7 percent of the total
world copper production; and Ghana and Mali together account for 5.8 percent of
the total world gold production.
“Resource-rich African countries have to make the
conscious choice to invest in better health, education, and jobs, and less
poverty for their people because it will not happen automatically when
countries strike it rich,” says Shantayanan Devarajan, the World Bank’s Chief
Economist for Africa, and lead author of Africa’s Pulse. “Gabon, for example,
with a per-capita income of $10,000 has one of the lowest child immunization
rates in Africa.”
Is
Africa becoming ‘a middle-income’ continent?
In its wide-ranging analysis of new developments in
Africa, the new report notes that after ten years of high growth, an increasing
number of countries are moving into ‘middle- income’ status, defined by the
World Bank as those countries achieving more than $1,000 per capita income.
Of Africa’s 48 countries, 22 states with a combined
population of 400 million people have officially achieved middle-income status;
while another 10 countries representing another 200 million people today would
reach middle-income status by 2025 if current growth trends continue or with
some modest growth and stabilization in countries such as Comoros and Zimbabwe.
Another seven countries which are home to 70 million
people could reach this milestone if they created economic growth of seven
percent growth over the coming years. For example, Sierra Leone could grow at
this rate because of its recent expansion in mining. Ten African countries,
which are ‘fragile’ and conflict- affected states, and with a combined
population of 230 million people, have almost no chance to reach middle-income
status by 2025.
Africa
increasingly urbanized
Africa’s Pulse also notes that with rapid population
growth Africa is urbanizing rapidly, with deep implications for social and
economic opportunities. No country has ever reached high income with low
urbanization.
Today, 41 percent of Africans live in cities, with an additional
one percent every two years. By 2033, Africa – like the rest of the world –
will be a majority urban continent. Urbanization and development go together.
Poverty rates on the continent have been falling faster than one percentage point a year and for the first time, between 2005 and 2008, the absolute number of people living on $1.25 a day fell. Child mortality has also been declining.
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