Africa: Economic Slowdown Expected Across Continent
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18 December 2001
Posted to the web 19 December 2001
Charles Cobb Jr.
Washington, DC
In the aftermath of the September 11 attacks, economic growth in Africa is expected to slow, according to the International Monetary Fund in its interim World Economic outlook report released Tuesday.
"The growth outlook for many African countries is expected to be held back by falling prices of almost all non-fuel commodities...although the impact will be partly offset by the lower price of oil imports," the report says.
This latest report forecasts African economic growth of 4.4 percent in 2002 compared to Africa's 5.8 percent in 2000. The number also represents a 0.9 percent drop from the October forecast (which was completed before September 11).
Prospects for individual countries, however, vary widely, and not all of Africa's numbers are gloomy. "Relatively healthy growth" - in the range of 4 to 6 percent - is expected for Cameroon, Ghana, Tanzania and Uganda. Around 8 percent is expected for Mozambique. In these African countries, the IMF says, "macro economic and structural policies have generally been sound."
South Africa's growth is expected to remain at 2.5 percent. That country's "vulnerability to external shocks has generally diminished," the Fund says, reflecting among other things, "strong macroeconomic fundamentals...and a healthy banking system."
Oil producers may not be hit quite so hard by the slowdown. Algeria's Oil Stabilization Fund built up during a period of high oil prices "will help cushion the downturn." The 11 percent anticipated for Angola in 2002 is due to increased oil production from new offshore oil fields.
In Nigeria, an effective mechanism to smooth oil price fluctuations is not in place and weaker growth - around 2 percent - is expected.
The Fund cautions, however, that its projections are "subject to great uncertainty... It remains difficult to judge how quickly confidence will rebound and how financial markets will develop, with much continuing to depend on non-economic factors, including progress in the war against terrorism."
IMF chief economist Kenneth Rogoff told reporters on Tuesday morning that he expects "fairly strong growth in 2003," but said that in light of the current conditions - "This is a period still of greater than usual uncertainty" - he would decline offering specifics.
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