Sub-Saharan Africa sees sound economic growth momentum in 2013
08 July 2013, 12:17
Nairobi - Boosted by increased exports of natural resources and robust investments from emerging economies, sub-Saharan Africa is expected to stay on a track of fast economic growth in 2013, in a vivid contrast to the gloomy picture of global recovery.
The International Monetary Fund (IMF) forecast in May revealed that the region would grow 5.4 percent in 2013 and 5.7 percent in 2014, and the upbeat estimation showcased the IMF's confidence and optimism in the development of the region in coming months.
With uneven distribution of natural resources and population, sub-Saharan Africa as a whole enjoys fast economic growth, with Ghana, Angola, Nigeria, Cote d'Ivoire, Mozambique, Tanzania, Ethiopia, and Rwanda leading the growth.
"Sub-Saharan Africa will be among the fastest growing places in the world, second only to developing Asia," Antoinette Sayeh, director of the IMF's Africa department, told journalists in Ghana's capital Accra.
Ghana, rich in oil and gas, is expected to reach a growth rate of 8 percent in 2013 and 8.7 percent in 2014, according to data released by the African Development Bank (AfDB).
Angola, also rich in oil, is expected to reach 8.2 percent in 2013 and 7.8 percent in 2014, ADB data showed.
According to IMF, Nigeria, the most populous African country and the second largest economy in Africa, can reach a growth rate of 7 percent in 2014.
Mozambique and Cote d' Ivoire are catching up with other fast-developing economies in the region, with both projected to grow 8 percent in 2013.
While on the east side of the continent, Tanzania is expected to grow 6.9 percent in 2013 and 7 percent in 2014, and Ethiopian's estimated growth rate for 2013 is put at 6.9 percent.
As the regional hub of eastern African countries, Kenya's economy is expected to reach 4.5 percent in 2013 and 5.2 percent in 2014, given its stable political environment after successful presidential elections in March this year.
Export and investment are the major driving factors for fast economic growth in the region. African countries have expanded their export destinations to more countries amid soaring global demand for oil, gas, and mineral resources.
The recent Ernst & Young Africa's Attractiveness 2013 survey showed great improvement in foreign direct investment on the continent as well. Africa received between 5.4 percent to 5.6 percent of global foreign direct investment last year, compared with 4.5 percent in 2010.
The continent, which used to draw investors mainly from Europe and the United States, have in recent years seen rising number of investors from emerging economies like China and India, which have heavy presence in infrastructure, energy and telecommunication and expanding roles in service and manufacture as well.
The fast-growing population in the region especially the growing middle class are also seen as a booming consumer market, attracting investors to tap into the potential of this region.
There have been significant improvements in infrastructure and governance in sub-Saharan Africa over the past decades, yet factors such as like poverty, disease, food shortage, and high illiteracy are still reasons for concerns among investors.
Poor infrastructure are increasing the cost of doing business on the continent and African leaders have stressed the need to mobilize resources to fund infrastructure improvement, rather than relying on foreign aid.
There is widespread concern among observers that Africa's reliance on foreign aid is potentially dangerous for the sustainability of programs designed to boost trade and economic development on the continent.
AfDB President Donald Kaberuka said dependence on donor aid to fund development projects by some African states should be discouraged.
"We have to figure out how to use the extensive resources of this continent for its own transformation," he noted.
However, many across the world still believe the most prominent factors that harm the growth potential of Africa are still armed conflicts and unstable politics.
Such deep-rooted malaise have plagued the continent for years, with some resource-rich areas seeing constant clashes or suffering protracted wars.
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