Local oil production helps foreign investment
11 June 2014, 22:39
Cape Town - Medium-term economic prospects for Sub-Saharan Africa remain favorable, with an estimated 4.7 percent GDP growth in 2014, a World Bank report showed on Wednesday.
The growth could rise moderately to 5.1 percent in 2015 and 2016, supported by robust external demand and investments in natural resources, infrastructure, and agricultural production, said the Global Economic Outlook report.
Growth is expected to be particularly strong in East Africa, supported by growing foreign direct investment flowing into offshore natural gas resources in Tanzania, and the onset of oil production in Uganda and Kenya, according to the report.
Although growth will remain subdued in South Africa, it will pick up modestly in Angola and Nigeria, the region's largest economy, the report said.
The regional aggregate, however, was depressed by a 1.9 percent growth in South Africa due to structural bottlenecks, tense labor relations and low consumer and investor confidence, the report added.
"Tight monetary policy combined with labor strikes and deficient electricity supply will keep growth subdued in South Africa," the report said.
In addition to South Africa, the average GDP growth in the region was 6.0 percent in 2013. Fiscal and current account deficits widened across the region, suggesting high government spending, falling commodity prices, and strong import growth, the report said.