Business
World Bank Tasks Africa On Economic Growth
Sub-Saharan Africa’s economic growth should accelerate to more than five per cent over the next three years, far outpacing the global average, but the region must do more to convert this into reducing poverty, the World Bank said last Monday.
In its latest Africa’s Pulse analysis of prospects for the region, the bank saw increased investment, high commodity prices and a pick-up in the global economy driving this expected growth surge in the world’s poorest continent.
It said foreign direct investment inflows to Sub-Saharan Africa were projected to increase to record levels each year over the next three years, reaching $54bn by 2015.
This compared to $37.7bn in 2012, a 5.5 per cent increase in a year when FDI flows for developing countries fell on average by 6.6 percent, the bank added.
The Washington-based multilateral lender predicted Sub-Saharan Africa’s growth would be 4.9, 5.1 and 5.2 per cent for 2013, 2014 and 2015 respectively.
In 2012, the region’s growth was estimated at 4.7 percent, Reuters reported.
“If properly harnessed to unleash their full potential, these trends hold the promise of more growth, much less poverty, and accelerating shared prosperity for African countries in the foreseeable future,” said Punam Chuhan-Pole, a lead economist in the World Bank’s Africa department.
Compared with Africa’s expected growth spurt, global GDP was projected to expand by 2.4 percent in 2013 and gradually strengthen to three and 3.3 per cent in 2014 and 2015.
The report said a decade of strong growth had reduced poverty in Sub-Saharan Africa, with provisional data showing that between 1996 and 2010, the share of Africans living on less than $1.25 a day fell from 58 per cent to 48.5 per cent.
But World Bank economists cautioned that high inequality and a dependence on mining and mineral exports in many countries had actually dampened the poverty-reducing effect of income growth.
“While the broad picture emerging from the data is that Africa’s economies have been expanding robustly and that poverty is coming down, the aggregate hides a great deal of diversity in performance, even among Africa’s faster growers,” said the World Bank’s Chief Economist for Africa, Shanta Devarajan.
Noting that higher growth did not automatically mean less poverty, the report said resource-rich countries such as Gabon, Equatorial Guinea, and Nigeria performed worse than their less resource-blessed fellows.
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