Africa’s economy set to grow

By Nawa Mutumweno – Africa’s economy will expand by 5% and 5.1% this year and 2012 respectively on the backdrop of rising infrastructure investment and agricultural productivity and a growing demand for the continent’s exports.

Falling exports and weak commodity prices slowed the continent’s growth to 2.3% in 2009, but improving global trade enabled Africa to rebound to 4.7% in 2010, according to the United Nation’s World Economic Situation and Prospects report launched in Ethiopia on Tuesday, January 18, 2011.

The growth is anchored on the recovery in global trade and the strong economic rebound in East Asia supported by a strong rebound in Africa’s commodity exports.

“Increased government spending on infrastructure, strong performance of the agricultural sector and new inflows of foreign investments in extractive industries underpinned strong growth in domestic demand,” the report says.

The continent’s overall growth has “masked” substantial disparities in economic performances by African countries, the UN adds.

Among the countries with “fast growing” economies with growing manufacturing and service sectors, as well as improving agricultural production and investments in infrastructure were  Ethiopia, Egypt, Uganda, Tanzania, Rwanda and Zambia.

Ethiopia’s economy would grow by 9.4% this year. Chad, Niger and Algeria,  on the other hand, were among a few countries expected to face weak economies in 2011, the UN projects.

“The slow-growing economies of the region are mostly characterized by continued political instability and/or insecurity with presumed adverse effects on investment and other drivers of growth,” the report elaborates.

The continent’s performance, however, was not strong enough to meet poverty reduction targets.

“Persistent high levels of underdevelopment, as well as continued widespread malnourishment will remain concerns in the near outlook.”