Ethiopia, Kenya, Tanzania and Uganda are expected to post strong growth supported by foreign direct investment (FDI) flows, World Bank (WB) report indicated.
According to the report, it is agriculture in Ethiopia, the offshore natural gas resource in Tanzania, the onset of oil production in Uganda and Kenya, attracting FDI and help boost the economy of the region.
The authors of the World Bank Global Economic Prospects (GEP) report released last week say economic activity was robust in much of Sub-Saharan Africa in 2013. In contrast, developing countries in general are headed for a third consecutive year of disappointing growth below 5 percent, as first quarter weakness in 2014 has delayed an expected pick-up in economic activity.
"Growth rates in the developing world remain far too modest to create the kind of jobs we need to improve the lives of the poorest 40%. Clearly, countries need to move faster and invest more in domestic structural reforms to get broad-based economic growth to levels needed to end extreme poverty in our generation," World Bank Group President Jim Yong Kim said. Despite emerging challenges, medium-term growth prospects for sub-Saharan Africa remain favorable.
However the report emphasizes that strong domestic demand underpinned GDP growth of 4.7 % in 2013, up from 3.7 % the previous year. The GEP report stated further that excluding South Africa, average regional GDP growth was 6.0% in 2013; fiscal and current account deficits widened across the region, reflecting high government spending, falling commodity prices, and strong import growth.
The World Bank's GEP states that regional GDP growth is projected to remain stable at 4.7% in 2014, strengthening to 5.1% in each of 2015 and 2016, supported by firm external demand and investments in natural resources, infrastructure, and agricultural production.
The strengthening recovery in high-income countries bodes well for export demand and investment flows, although weaker commodity prices and slower growth in emerging markets will moderate growth of FDI flows to the region to $32.5 billion in 2014, from $31.9 billion in 2013. Source: Business week.