Highlights Of The World Bank Africa's Pulse Report

On Monday, Washington-based multilateral lender released its biannual report on Africa's economy, Africa Pulse.

Here are some of the key highlights of the report:

The good Prospects

The Washington-based multilateral lender predicted that:

·         Sub-Saharan economies are set to grow by more than 5 percent.

·         Sub-Saharan Africa's growth would be 4.9, 5.1 and 5.2 percent for 2013, 2014 and 2015 respectively.

·         Higher commodities, increasing investment and a general pick-up in the world economy should all boost the continent's growth to more than 5 percent.

·         Investment in infrastructure would be key to the continued success of the oil and gas sectors in East Africa and the exploitation of the huge coal deposits in Mozambique.

·         The mineral sectors in places such as Ghana, Guinea, Liberia, Nigeria and Sierra Leone should continue to attract investment

·         Global GDP is expected to grow by an average of 2.4 percent in 2013.

·         Foreign Direct Investment in Sub Saharan Africa will accelerate from around $35 billion in 2011 to a record $ 54 billion in 2015, as companies exploit new oil and mineral discoveries in Mozambique, Sierra Leone and other countries.

"Inflows to the extractive industries sector and, to a lesser extent, the agriculture sector should be supported by high, if somewhat softening, commodity prices over the next two to three years." – World Bank Africa Pulse report.

·         Strong economic growth in Africa had significantly reduced the extent of poverty in Africa over the past decade or so.

·         Africans living on less than $1.25 a day fell from 58 percent to 48.5 percent between 1996 and 2010. "If properly harnessed to unleash their full potential, these trends hold the promise of more growth, much less poverty, and accelerating shared prosperity for African countries in the foreseeable future," said World Bank economist, Punam Chuhan-Pole.

·         "Better governance will need to underpin efforts to make growth more poverty reducing."

Concern

·         Africa is set to grow 4.9 percent this year and 5.1 percent in 2014 - well below the International Monetary Fund's January estimate for the region to grow 5.8 percent  this year and 5.7 percent in 2014. This reflects a mounting strife on the continent.

·         Poverty reduction is held back by income inequality and a reliance on mineral and mining exports in some African countries. Resource-rich countries such as Equatorial Guinea, Nigeria and Gabon were singled out as making less progress in combating poverty than other African countries with fewer natural resources.

·         Food price spikes could be a cause for concern.

·         Coups and political crises across sub-Saharan Africa are weighing on the region's economic growth. "In 2012, labor unrest in South Africa, terrorist activity in parts of Nigeria, coups d'etat in Mali and Guinea- Bissau, and political stalemate in Guinea and Madagascar curtailed economic activity to varying degrees," the bank said. "Though most economies in the region remain stable, simmering conflicts, particularly in the fragile states, continue to pose an important downside risk to their economic activity in the medium term."

·         A fragile global recovery, whether characterised by a deterioration of market conditions in the euro zone or a weaker pickup in the United States, could still undermine the positive African outlook.

·         With Chinese demand accounting for 50 percent of many industrial metals exported from Africa, a sharper-than-envisaged downturn there could lead to a slump in commodity prices, which would hurt resource-reliant African states.

·         "While the broad picture emerging from the data is that Africa's economies have been expanding robustly and that poverty is coming down, the aggregate hides a great deal of diversity in performance, even among Africa's faster growers," said Shanta Devarajan, the World Bank's chief economist for Africa.

Advise:

World Bank Africa Pulse report says:

·         African governments have to do more to ensure that this growth reduced poverty.

·         “African governments should administer mineral wealth better, develop agriculture and manage rapid urbanisation to help bring down poverty levels further”- World Bank said. 

·         Infrastructure development is critical to ensure the strong pace of economic growth.

Read Full Report here: http://www.unmultimedia.org/tv/unifeed/2013/04/world-bank-africas-pulse/