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

US Investors Eye IPO for China's Alibaba

E-commerce giant handled 80 percent of China's online business last year, logging more Internet transactions than US-based Amazon.com and eBay combined More

Video Uneasy Calm Settles Over Israel, Gaza Strip

As cease-fire begins, Palestinians celebrate in streets; Israelis remain wary More

Video Chinese Doctors Use 3-D Spinal Implant

In treatment of a 12-year-old boy Chinese doctors used a 3-D printer and special software to create an exact replica of vertebra More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Chinese Doctors Use 3-D Spinal Implanti
X
August 27, 2014 4:53 PM
A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. VOA News reports from Kolkata.
Video

Video Northern California Quake: No Way to Know When Next One Will Hit

A magnitude 6.0 earthquake rocked northern California’s Napa Valley on Sunday. Roads twisted and water mains burst. It was the wine country’s most severe quake in 15 years, and while hospitals treated many people, no one was killed. Arash Arabasadi has more from Washington on what the future may hold for those residents living on a fault line.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.
Video

Video Ukraine: Captured Troops Proof of Russian Role in Separatist Fight

Ukrainian officials say they have captured Russian soldiers on Ukrainian territory -- the latest accusation of Moscow's involvement in the conflict in eastern Ukraine. VOA's Gabe Joselow reports from the Ukrainian side of the battle, where soldiers are convinced of Russia's role.
Video

Video Rubber May Soon Come From Dandelions

Synthetic rubber has been around for more than a century, but quality tires for cars, trucks and aircraft still need up to 40 percent or more natural rubber content. As the source of natural rubber, the rubber tree, is prone to disease and can be affected by bad weather. So scientists are looking for replacements. And as VOA’s George Putic reports, they may have found one in a ubiquitous weed.
Video

Video Jewish Life in Argentina Reflected in Yiddish Tango

Jewish people from across Europe and Russia have been immigrating to Argentina for hundreds of years. They brought with them dance music that were eventually mixed with Argentine tango. The result is Yiddish tango -- a fusion of melodies and cultural experiences that is still evolving today. Elizabeth Lee reports from the Skirball Cultural Center in Los Angeles, where one band is bringing Yiddish tango to an American audience.

AppleAndroid