Economies of Africa are forecast to grow 4.5 per cent this year and 5 per cent in 2016, nearing the growth levels seen before the 2008-2009 global financial crisis, according to a latest report released by the African Development Bank (AfDB) yesterday.
Abidjan, Ivory Coast-based AfDB, formed in 1964, is a multilateral financial institution with its goal to fight poverty and promote sustainable development in the continent.
The ''African economic outlook'' is an annual publication jointly prepared by the African Development Bank (AfDB), the OECD and the United Nations Development Programme (UNDP).
According to the report, economic growth in Africa is estimated at a subdued 3.9 per cent in 2014 due to fall in commodity prices and domestic problems in several countries. In 2015 and 2016, economic growth, which is likely to be uneven, will be driven by the overall upturn in the world economy, improved domestic demand and stronger exports.
''African countries have shown considerable resilience in the face of global economic adversity,'' AfDB's chief economist Steve Kayizzi-Mugerwa said.
''For future growth to be sustainable and transformative will require that its benefits are shared more equitably among the population and that governments continue to pursue policies that promote economic stability,'' he further stated.
Africa's biggest economy, Nigeria, registered an impressive 6.3-per cent growth in 2014 despite the oil price slump, relying on its diversified non-oil sector. The country is expected to post a 5-per cent growth this year followed by 6 per cent in 2016.
However, South Africa, the continent's second-largest economy, registered a meager 1.5-per cent expansion last year due to fall in commodity prices, strikes and power shortages. Only a gradual recovery is anticipated for the country with 2-per cent growth in 2015 and 2.5 per cent next year.
Region-wise, East Africa is the continent's fastest growing region with 7.1-per cent expansion in 2014 on the back of increased foreign direct investment (FDI), services and construction, and is expected to continue at 5.6 per cent this year and 6.7 per cent in 2016. Ethiopia, Kenya, Rwanda, Tanzania and Uganda kept up their relatively high growth and are forecast to register plus 6-per cent expansion in 2015 and in 2016.
West Africa registered a 6-per cent growth in 2014 despite the Ebola virus threat that badly affected the economies of Guinea, Liberia and Sierra Leon.
The region is likely to post a 5-per cent expansion this year and 6.1 per cent next year, mainly led by Nigeria, Ivory Coast, Niger and Mali.
Economic growth in Central Africa was 5.6 per cent last year which is expected to remain stable at 5.5 per cent and 5.8 per cent respectively in the following two years with high growth particularly in the Democratic Republic of Congo, Chad and Congo.
Despite some damage due to commodity prices, the mining and related sectors are expected to drive growth in the region although in some countries growth will be broad based. Growth in Equatorial Guinea will continue to suffer badly due to fall in oil prices.
Southern Africa, which posted a mere 2.7-per cent growth in 2014, is expected to make only a modest recovery with 3.1-per cent expansion in 2015 and 3.5 per cent next year.
The subdued growth in the region is due to weak growth in South Africa, the region's key economy. Mozambique and Zambia are expected to post impressive plus 6-per cent growth in the next two years.
The lowest growth of 1.7 per cent was recorded by Northern Africa due to power struggles and political instability in the region particularly in Libya.
However, the economy is forecast to improve to 4.4 to 4.5 per cent in the next two years as situation is expected to get better in Egypt, the continent's third-biggest economy, and Tunisia along with higher growth prospects in Morocco and Mauritania.
External financial inflow is projected to increase almost 7 percent to $193 billion this year, on the back of higher foreign direct investment (FDI) and as well as rise in portfolio investments, the report said.
FDI is forecast to reach $73.5 billion in 2015, underpinned by Greenfield investment from China, India and other countries.
''African economies could benefit from mobilising the wide and extraordinary untapped potential of their diverse regions. Putting people and places at the centre of policy-making may improve Africa's competitiveness and the well-being of Africans'' OECD director Mario Pezzini said.
Africa's population is expected to double to over 2 billion by 2050 with its workforce increasing to about 910 million. According to economists, this could boost growth in much the same way as in China and India.
"This phenomenon may be helpful as was the case with India and China because the demographic dividends usually help growth," Pezzini told AFP.
But, if Africa fails to absorb the enormous youth bulge in the labour market, "then you may have very strong tensions," he warned.