African economic prospects: Where to from here?

Under the theme “Delivering on Africa’s Promise”, the 23rd World Economic Forum (WEF) on Africa will provide an important platform for regional and global leaders from business, government and civil society to deepen the continent’s integration agenda and renew commitment to a sustainable path of growth and development.

In one of the closing public sessions at the 2013 World Economic Forum in Cape Town, an influential group of speakers will share insights on the subject of the African Economic Outlook.

Speakers include Linah K. Mohohlo, Governor and Board Chairman of the Bank of Botswana; South Africa’s Finance Minister Pravin Gordhan; Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance of Nigeria; Benno Ndulu, Governor of the Bank of Tanzania; and Anders Borg, Minister of Finance of Sweden.

Moderated by television host and entrepreneur Julie Gichuru, the discussion will centre on such issues as:

  • How current developments are informing the region’s economic outlook for the year to come
  • Increasing productivity and employment
  • Leveraging innovation as a growth engine and
  • Collaborating with other regions.

Robust growth expected to continue

The IMF’s World Economic Outlook 2013 and the World Bank’s latest “Africa’s Pulse” (a twice-yearly analysis of the issues shaping Africa’s economic prospects) provide the following insights on African economic performance and the outlook for 2014…

1. Sub-Saharan Africa experienced robust growth in 2012 and is expected to continue growing at a strong pace during 2013–14, with both resource-rich and lower-income economies benefiting from robust domestic demand. Growth in sub-Saharan Africa is projected to reach 5.5% in 2013 and rise to around 6% in 2014 – far outstripping the global average of 4%.

2. In 2012, about a quarter of African countries grew at 7% or higher and a number of African countries – Sierra Leone, Niger, Cote d’Ivoire, Liberia, Ethiopia, Burkina Faso and Rwanda – are among the fastest growing in the world.

Investment in infrastructure

3. The continent’s generally strong performance is due largely to ongoing investment in infrastructure and productive capacity, continuing robust consumption, and the activation of new capacity in the mining sectors. Ivory Coast and Mozambique will lead the way with expansion of 8% in 2014. Nigeria’s rebound from the floods and implementation of power sector reform will boost its growth in 2013, and to drive growth to 7% in 2014.

Among middle-income countries, South Africa is forecast to grow at a muted 2¾% in 2013 (owing to sluggish mining production, the weakness of demand in the Euro area, its main export market, and last year’s mine strikes) and to rise to 3.3% in 2014.

4. At 4¾ percent, regional GDP growth was slightly lower than forecast in the IMF’s October 2012 World Economic Outlook, reflecting mainly the impact of floods on oil and non-oil output in Nigeria and labour strikes in South Africa.

Growth in sub-Saharan Africa

5. Headline growth in sub-Saharan Africa in 2012 was visibly affected by the interruption of oil exports from South Sudan. Activity in Mali and Guinea-Bissau was adversely affected by civil conflict, but Angolan oil production strengthened and Côte d’Ivoire experienced a sharp rebound in economic activity after the election-related disruptions of 2011.

What do you think of the growth outlook for 2014? Is the economic outlook as robust as the IMF and World Bank seem to indicate?

Watch this space for more insights into Africa’s economic performance and 2014 outlook…

David Okwara

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