Africa set to grow by 4.5%

Experts scale down previous forecasts

AFRICA’S overall economy should advance this year, expanding by 4.5%, showing resilience despite weak commodity prices and the devastating Ebola epidemic, an annual report published yesterday said.

And future growth could be spurred by the continent’s population doubling to two billion over the next 35 years, repeating in Africa the economic boom seen in Asia’s biggest countries.

The report, co-authored by the Organisation for Economic Co-operation and Development (OECD), the African Development Bank and the UN Development Programme, said: “Africa’s gross domestic product (GDP) growth is expected to strengthen to 4.5% in 2015 and 5% in 2016 after subdued expansion in 2013 (of 3.5%) and 2014 (3.9%).”

The continent had so far been “relatively resilient to the sharp fall in international commodity prices”, the re- port said, indicating crude prices which fell more than 50% between June and January.

And if the commodity prices remain low, the report warned that the economies of resource-rich countries, like oil exporters Nigeria and Angola, might slow down as their governments would inevitably have to trim spending.

The forecast is a downward revision from projections made last year suggesting that Africa’s economy would expand by 5.7% this year.

At the same time, economists noted that Africa’s increasing population could boost growth in much the same way that population booms fuelled development in China and India.

“This phenomenon may be helpful as was the case with India and China because the demographic dividends usually help growth,” OECD Development Centre director Mario Pezzini said.

But, if Africa fails to absorb the enormous youth bulge in the labour market, “you may have very strong tensions”, he said.

An estimated 23 million youths are expected to enter the African labour market this year alone, the report said.

Of those, four million will be in northern Africa, the region that dragged down the continent’s growth rates last year, as a result of fall-out from the 2011 Arab Spring uprisings.

That region grew by just 1.7% last year.

Southern Africa slowed to below 3% in 2014 due to labour unrest in South Africa, which grew by just 1.5%.

“In part the lower rates of growth in Africa were related to the social crises in South Africa. We are expecting that [they] are reducing now and as such South Africa will have a rate of growth better than in the past,” Pezzini said.

Despite being ravaged by Ebola, the West African region faired relatively well, posting an average 6% growth last year.

East Africa was the best-performing region, accelerating more than 7% last year. – AFP