News / Africa

Africa Sees Strong Economic Growth

World Bank forecasts strong growth for sub-Saharan Africa.  (World Bank)World Bank forecasts strong growth for sub-Saharan Africa. (World Bank)
x
World Bank forecasts strong growth for sub-Saharan Africa.  (World Bank)
World Bank forecasts strong growth for sub-Saharan Africa. (World Bank)

Multimedia

Audio
  • Listen to De Capua report on World Bank forecast for Africa

Joe DeCapua
The World Bank says while the global economic recovery remains slow, sub-Saharan African countries continue to grow at a strong pace. The bank has released its latest economic forecast for the region.


Four years after the start of the economic crisis, the World Bank describes the global recovery as “tepid,” especially in the euro zone. Sub-Saharan Africa, on the other hand, has some of the fastest growing economies in the world, thanks to domestic demand and commodity prices that remain high. That’s according to the latest edition of the World Bank report called Africa’s Pulse.

“The report finds that Africa has been growing at a sustained, robust pace in 2012 and the region grew by 4.7 percent, which is double the rate of growth of the global economy. And this growth is impressive because it is in spite of the tepid and weak recovery that the global economy was experiencing in 2012,” said Punam Chuhan-Pole, lead economist for the Africa region, who is the co-author.


She said that if you exclude South Africa, which was hit by the recession, the sub-Saharan economy actually grew by 5.8 percent. Some individual countries had an even higher growth rate.

Several countries, such as Ethiopia, Rwanda, Ghana have managed to grow at 7 percent or more in each of the past three years. That means 2010, ’11 and ’12. And several other countries have also been growing at a strong pace, for example, Nigeria, Zambia, Tanzania, the Democratic Republic of Congo.

Despite the slow global recovery, Foreign Direct Investment, or FDI, actually increased in sub-Saharan Africa by 5.5 percent to $37.7 billion in 2012. In fact, it continued to grow in Africa while falling elsewhere in the developing world.

Chuhan-Pole also said domestic spending rose, as did government spending in infrastructure.

“So with government capital spending increasing to meet some of the large gaps in power and transportation, energy, Africa’s investment has been rising. Also, private consumption has been supported by declining inflation as well as lower interest rates and also easier access to credit. In addition, agricultural income in several countries increased. So all of this has helped to keep private consumption rising,” she said.

The World Bank forecast said that sub-Saharan Africa’s economic growth is expected to average over 5 percent between 2013 and 2015. However, there are risks, such as the weak global recovery.

Chuhan-Pole also said growth has been good for poverty reduction, just not good enough.

“What to we mean by that? If you look the period since 1996, per capita GDP has improved at a fairly brisk pace of 2.4 percent per annum. However, there’s variation across countries. We find that resource rich countries grew at over twice the rate as resource poor countries,” she said.

The World Bank’s outgoing Chief Economist for Africa, Shanta Devarajan, says harnessing economic growth to accelerate poverty reduction is the biggest issue facing policymakers. That’s especially true, he says, with more countries discovering they’re rich in resources. Almost 50 percent of the region’s population lives on $1.25 a day.

“What we have to realize is that resource income or resource revenues are not necessarily the fastest way to reduce poverty for the very simple reason that growth in resource rich countries occurs in the extractive sector, but the poor earn their income from agriculture. Seventy percent of the poor are actually working in agriculture,” he said.

He said there are several ways to ensure resource wealth benefits the population and not just the oil, gas or mineral companies. First, he says, contracts must be as transparent as possible, so countries get their fair share. The next step is to spend that money wisely, for example, on infrastructure, like electricity, along with health and education. He says safety nets and cash transfers should be available to shield the population from poverty and global economic shocks.

Devarajan said that agriculture is another good place to invest.


‘There’s an estimate that worldwide, something like, one percent growth in agriculture is four times as powerful in reducing poverty as non-agricultural growth.”

He said Africa has the potential to be – what he calls – the workbench of the world, as well as the source of savings, investment and growth. Much of that has to do with the continent’s demographics, which are bucking the world trend.

“Africa is going to be the youngest continent in the world. We have a youth bulge and the number of 15 to 65 year olds is going to be the highest in Africa in about 20 years. And that means that we have an opportunity because the number of working people relative to the number of dependents, if you like, very young and very old, is going to be increasing in Africa, whereas in the rest of the world, frankly, it’s going to be decreasing,” he said.

The World Bank’s Africa’s Pulse report also said good progress has been made on a few of the Millennium Development Goals. But the progress across the region has been uneven and, overall, the region lags in achieving development goals.

You May Like

Turkey: No Ransom Paid for Release of Hostages Held by IS Militants

President Erdogan hails release of hostages as diplomatic success but declines to be drawn on whether their release freed Ankara's hand to take more active stance against insurgents More

Audio Sierra Leone Ends Ebola Lockdown

Health ministry says it has reached 75 percent of its target of visiting 1.5 million homes to locate infected, educate population about virus More

US Pivot to Asia Demands Delicate Balancing Act

As the tumult in the Middle East distracts Obama, shifting American focus eastward appears threatened More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Natural Gas Export Plan Divides Maryland Towni
X
Deborah Block
September 21, 2014 2:12 PM
A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Alibaba Shares Soar in First Day of Trading

China's biggest online retailer hit the market Friday -- with its share price soaring on the New York Stock Exchange. The shares were priced at $68, but trading stalled at the opening, as sellers held onto their shares, waiting for buyers to bid up the price. More on the world's biggest initial public offering from VOA’s Bernard Shusman in New York.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid