UN : 'Africa will continue to enjoy robust economic growth'

22 Janvier 2014

LIBREVILLE,  JAN 22 (Infosplusgabon) -  Africa’s economic growth prospects remain relatively robust and should continue to increase, according to the UN World Economic Situation and Prospects 2014 (WESP) released on Tuesday.

The report stated: "After an estimated growth of 4.0 per cent in 2013, as measured by the Gross Domestic Product (GDP), economic growth in Africa is projected to accelerate to 4.7 per cent in 2014 and 5.0 per cent in 2015".

It noted that growth prospects in Africa are expected to be supported by improvements in the global economic and regional business environment, relatively high commodity prices, easing infrastructural constraints and increasing trade and investment ties with emerging economies.

"Other important factors for Africa’s medium-term growth prospects include increasing domestic demand especially from a growing class of new consumers associated with urbanization and rising incomes and improvements in economic governance and management," it said.

The report also disclosed that other economic indicators vary. Inflation across Africa is expected to decelerate slightly from an average of 8.0 per cent in 2013 to 7.8 per cent in 2014.

It also said that Africa’s average fiscal deficit increased from 1.35 per cent in 2012 to 1.80 per cent of GDP in 2013.

"Africa’s overall current-account deficit is expected to slightly decline from 1.8 per cent of GDP in 2013 to 1.7 per cent in 2014," it added.

The report said that growth in East Africa is expected to increase from 6.0 per cent in 2013 to 6.4 per cent in 2014.

It noted that real GDP growth in East Africa will benefit from several positive factors, including increased consumer spending in Kenya increased consumption and investment in the natural gas sector in Tanzania and increased activity in construction, transport,
telecommunications, financial services, exploration and construction in the burgeoning oil industry in Uganda.

It also said that improved agricultural and service sector growth spearheaded by the wholesale and retail trade sector performance in Ethiopia, will boost economic growth in the region.

"In Ethiopia, GDP growth was 6.9 per cent in 2013, and is expected to be 6.5 per cent in 2014, and inflation is expected to pick up slightly next year to 9.5 per cent from 9.1 per cent in 2013," it said.

"In Southern Africa, growth is projected to increase from 3.6 per cent in 2013 to 4.2 per cent in 2014 in Southern Africa. Growth prospects in Southern Africa are improving, largely because of projected increases in South Africa’s growth rate from 2.7 per cent in 2013 to
3.3 per cent in 2014.

"Others are declining labour market unrest, increased investments and rising mineral output. Southern Africa is likely to attract increased foreign investment thanks to huge coal deposits and offshore gas discoveries in Mozambique.

"Also, increased oil output in Angola, and the increased investment in the copper sector in Zambia and uranium mining in Namibia will enhance economic growth in the region," the report stated.

It, however, said in North Africa the political instability and disruptions in oil output continue to weaken growth prospects in North Africa, especially in Egypt, Libya and Tunisia.

It noted that growth in North Africa is expected to improve from 2.3 per cent in 2013 to 3.3 per cent in 2014, contingent on the assumption that some stability returns.

"Despite the positive growth picture, the employment situation remains a major problem across North Africa. Also, high youth unemployment is a concern that continues to contribute to social pressures.

"Wide gender disparities in employment and earnings are also a significant issue, while women face unemployment rates that are at least double that of men in countries such as Algeria and Egypt," the document stressed.

In West Africa, the report noted that growth in the region is expected to increase from 6.7 per cent in 2013 to 6.9 per cent in 2014.  

It said: "West Africa will continue to attract investments in the oil and minerals sector, a key source of growth in the sub-region, especially in countries such as Burkina Faso, Ghana, Guinea, Liberia, Niger, Nigeria and Sierra Leone."

On Central Africa, it said that the region’s growth is expected to accelerate in 2014 to 4.8 per cent from a decrease to 4.2 per cent in 2013, mainly due to political instability and violence in the Central African Republic, deceleration in oil production in the Congo (Brazzaville) and Equatorial Guinea, and reduction in oil exports from Gabon.

The report , however noted that Africa’s recent growth is heavily driven by commodity production and exports, but remains far below the continent’s potential.

"Growth is still failing to translate into meaningful job creation and the broad-based economic and social development needed to reduce the high poverty and rising inequality rates in many countries.

"The informal sector is still large and opportunities remain limited for many seeking to enter the labour market, as seen by high youth unemployment rates and wide gender disparities in earnings.

"Continual pressure on labour markets from a steady stream of new entrants due to population growth has meant that even solid GDP growth rates have not been sufficient to make measurable impacts," it stated.

It added that the lack of economic diversification away from the heavy dependence on resource extraction or agriculture is a key reason why labour demand is not more dynamic.

However, it said that continued growth in other sectors such as telecommunications, financial services, transport and construction in countries such as Ghana, Kenya and Nigeria is helping to change this situation.

"Despite the expected robust growth prospects, some significant internal and external downside risks and uncertainties could derail progress in Africa.

"A global economic slowdown would have a significant negative impact on Africa’s performance. Changes in global commodity prices and terms of trade are also key risk factors Africa faces.

"Political, civil and labour unrest still pose a significant threat to economic activity in several African countries, including Central African Republic, the Congo, Democratic Republic of the Congo, Egypt, Libya, Mali, Somalia, South Africa, South Sudan and Tunisia.

"In addition, with many African economies relying on agriculture, weather-related shocks represent a key downside risk for economic growth and upside risk for agricultural prices," it concluded. (Source  PANA).

FIN/INFOSPLUSGABON/YER/GABON2014

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