Sub-Saharan Africa to grow strong at 4.9% in 2013
The October issue of the World Bank’s Africa’s Pulse forecasts that GDP growth in Africa will rise to 5.3% in 2014 and 5.5% in 2015, on the back of rising private investment (Image: www.africanliberty.org)
Sub-Saharan Africa (SSA) continues to demonstrate strong economic growth with its combined GDP growth forecast standing at 4.9% in 2013, according to the October issue of the World Bank’s Africa’s Pulse. The report, an in-depth analysis of economic issues shaping Africa, underlines that almost a third of countries in the region are growing at 6% and more, putting Africa in the reckoning for the fastest-growing economies in the world.
Moreover, GDP growth in Africa will rise to 5.3% in 2014 and 5.5% in 2015, on the back of rising private investment in the region and remittances worth $33 billion a year supporting household incomes. Increased production of mineral resources, continued government investments and strong performances by the agriculture and service sectors will continue to power the growth of SSA.
Further, tourism is an increasingly important driver of growth in several Sub-Saharan African countries. Among the destinations for which quarterly data are available, the strongest performers were Cape Verde (+18%), followed by the Seychelles (+13%), South Africa (4%), Swaziland (+2%), and Mauritius (+1%). International tourist arrivals in the region are expected to remain robust in the second half of 2013.
Gross fixed capital formation in the region has steadily increased from about 16.4% of GDP in 2000 to about 20.4% in 2011. Strong private investment underpins economic growth and boosts the productive capacity of the region’s economy.
Across the region, governments have stepped up investment spending, especially for developing infrastructure, which continues to be a constraint for emerging economies. Moreover, increasingly, such infrastructure projects are being financed from new funding sources, including from some large developing countries (in particular, China, but also from Brazil and India). In addition to raising funds from new bilateral sources, Sub-Saharan African sovereigns have continued the recent trend in raising funds from international capital markets.
Even as Africa’s growth rates continue to be powered by investment and tourism, Africa’s Pulse notes that poverty and inequality remain “unacceptably high and the pace of reduction unacceptably slow.” Almost one out of every two Africans lives in extreme poverty today. Optimistically, that rate will fall to between 16% and 30% by 2030. The report suggests that most of the world’s poor people by 2030 will live in Africa.
The report also notes with concern that exports from Sub-Saharan Africa have unfortunately remained concentrated in a few commodities such as oil, metals and minerals.
However, while traded commodities have stayed the same, the region has succeeded in diversifying its trading destinations. The BRIC countries—Brazil, Russia, India and China— now account for 36% of the region’s exports. In fact, these exports reached a whopping $144 billion in 2012, almost at the same level of Africa’s exports to the EU and the United States combined, which stood at $148 billion.
Source: World Bank’s Africa Pulse Report