Africa is slowly emerging from the global recession and should grow 4.5 percent this year and just over five percent in 2011, a report by the African Development Bank and the OECD forecast.
The rate of growth is an improvement on the average 2.5% experienced by the continent’s 53 states in 2009 but still short of the six percent annual rise achieved between the global financial crises exploded in 2008.
Poverty remains rife but most African states have benefitted from a more stable political environment in recent years to begin the catch up with the developed world.
“If the world economy and world trade continue to recover, and commodity prices remain close to current levels, the continent’s outlook in 2010 and 2011 is promising,” said the joint annual report by the Bank and the Paris-based Organisation of Economic Co-operation and Development (OECD).
The forecasts were broadly in line with April forecasts by the International Monetary Fund (IMF), which is predicting 4.75% growth in sub-Saharan Africa this year and six percent in 2011.
Africa’s share of global trade is still tiny — three percent of the value of total world exports — and the report said it was still unlikely to meet United Nations’ Millennium Development Goals of halving poverty by 2015, especially with a mushrooming population.
The AfDB estimated the continent would need around $50 billion a year in extra financing to attain that goal.
Besides the global economic recovery and strong commodity prices, the report cited better terms of trade and development finance as reasons why the continent has managed to weather the worst global recession since World War Two.
“This trend is expected to continue and could even be reinforced if structural bottlenecks are addressed and the business environment further improved. Foreign investment is also set to play a critical role in boosting the continent’s recovery,” it said.
The report noted that growth rates are likely to be uneven, with the economies of East Africa — including fast-growing Uganda and Tanzania — faring best with an average six percent growth this year and next.
By contrast, North and West Africa were expected to post GDP gains of five percent, Central Africa four percent and Southern Africa, which was worst hit by the global downturn, four percent for this year and next.