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African Economies Rebounding from Global Economic Crisis

African Economies Rebounding from Global Economic Crisis
African Economies Rebounding from Global Economic Crisis
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The African Development Bank says the continent is rebounding from the global financial crisis, with 80 percent of African economies expected to grow this year.  

At its annual general meeting in Ivory Coast this week, African Development Bank officials say real gross domestic product on the continent is expected to reach 4.5 percent this year, well above the global average.

That growth could top five percent by 2011, putting African economies back on a 10 year track that was disrupted by last year's global economic crisis.

But the recovery will be uneven.  Southern Africa was hardest hit and will take longer to rebound.  East Africa best weathered the global financial crisis and will likely achieve the highest average growth, in the next year.

Foreign donors have widely praised African Development Bank efforts to soften the impact of the financial crisis by more than doubling concessionary lending. That has led donors to triple its capital base to $100 billion.

Bank President Donald Kaberuka says the extra money will go to infrastructure and power.

"It's timely. It's a vote of confidence in Africa," Kaberuka said. "I think it will give us enough firepower for now to provide the kind of response that we need to meet some of these structural concerns which are mainly, again, around infrastructure."

New power projects include a wind farm in northern Kenya, several hydroelectric programs and coal and gas-powered plants.

"There's no way this continent can grow, living on energy less than Spain," Kaberuka said.

The African Development Bank kept its summit in Abidjan, despite political tensions surrounding Ivory Coast's much-delayed presidential vote.  Bank governor Antoine Bohoun Bouabre says security is a priority, as bank headquarters remain in Ivory Coast.

Bouabre says, now that security has been restored, the bank and Africa have entrusted Ivory Coast to keep its headquarters here.  He says it is a responsibility that is the government's duty to fulfill.

African Development Bank officials say stability in the financial sector has been key to weathering the global economic crisis. They point to Nigeria's Central Bank buying-up non-performing loans at 10 failing banks then establishing an asset management corporation to help recapitalize those banks so they will be able to repay part of the bail-out.

The bank says African governments can promote growth by adopting sustainable fiscal policies that increase tax revenue by encouraging investment.  It says broader use of a new generation of information and communication technology can overcome long-standing infrastructure weaknesses and reduce the cost of doing business.  

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