29 May 2012

Africa: Growth to Reach 4.5 Percent

Photo: http://www.afdb.org/en/annual-meetings/
Developing Africa.

Arusha — AFRICA'S economy will grow by 4.5 per cent in 2012 after recovering from the impact of the 2009 global financial crisis and the 2011 Arab revolts, experts predicted in a report on Monday.

"Africa's economy should see a rebound in 2012 after popular uprisings in northern Africa and political unrest brought overall economic growth to 3.4 per cent in 2011," according to a report issued at the start of African Development Bank (AfDB) annual meetings here.

"The continent is recovering from the global financial crisis of 2009 and this should be sustained even though a new global slowdown is constraining Africa's growth," it added.

"With the gradual recovery of North African economies, Africa's average growth is expected to rebound to 4.5 per cent in 2012 and to 4.8 per cent in 2O13."

However, sub-Saharan Africa has an annual population growth rate of 2.2 per cent, according to the UN population fund, outpacing economic gains in many nations.

The report was drawn up by the African Development Bank (AfDB), the Organisation for Economic Cooperation and Development (OECD), the United Nations' Economic Commission for Africa (ECA) and the UN development agency UNDP.

"While keeping an eye on new economic storm clouds in Europe, Africa must keep its focus on reforms that encourage growth and ease social tensions that set off the Arab revolutions and caused North Africa's GDP growth to decline by 3.6 percentage points to near stagnation in 2011," the report said.

The report noted that the African continent continues to benefit from relatively high growth in emerging economies, such as China and India, which have become increasingly important for Africa's trade and investment.

But it warned that "while this is helping Africa to be more resilient, these countries cannot fully compensate for the adverse effects from advanced countries and their expansion has recently also slowed."

President Jakaya Kikwete is expected to officially open the meeting on Thursday. The meeting is expected to attract over 2,000 delegates.

Meanwhile, the then Minister for Finance and Economic Affairs, Mr Mustafa Mkulo, told Tanzanians that the national economy was growing at a healthy 7.0 per cent and that the nation had the fastest growing economy in East Africa.

The minister, however, has also said that inflation keeps rising and the rate is now approaching 20 per cent. These figures do not sound encouraging enough to the nation and do not help the poor, some of whom now live far below the poverty line, he said.

Inflation alone cannot trigger such a massive hike in the prices of food items. Other factors in this sorry spectacle have been determined as including the run-away industrial production costs caused by high electricity and fuel tariffs, he said.

And there are other underlying factors that include galloping transportation costs and greed on the part of business people who are keen on making a windfall amid escalating poverty.

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