Economic growth in Sub-Saharan Africa is likely to reach more than 5 percent on average in 2013-2015 as a result of high commodity prices worldwide and strong consumer spending on the continent, ensuring that the region remains amongst the fastest growing in the world - according to the World Bank's latest Africa's Pulse, a twice-yearly analysis of the issues shaping Africa's economic prospects.
NAIROBI, KENYA (FILE) (REUTERS) - Sub-Saharan Africa's economic growth should accelerate to more than 5 percent over the next three years, far outpacing the global average, but the region must do more to convert this into reducing poverty, the World Bank said on Monday (April 15).
In its latest Africa's Pulse analysis of prospects for the region, the bank saw increased investment, high commodity prices and a pick-up in the global economy driving this expected growth surge in the world's poorest continent.
It said foreign direct investment (FDI) inflows to Sub-Saharan Africa were projected to increase to record levels each year over the next three years, reaching 54 billion US dollars by 2015.
This compared to 37.7 billion US dollars in 2012, a 5.5 percent increase in a year when FDI flows for developing countries fell on average by 6.6 percent, the bank added.
The Washington-based multilateral lender predicted Sub-Saharan Africa's growth would be 4.9, 5.1 and 5.2 percent for 2013, 2014 and 2015 respectively. In 2012, the region's growth was estimated at 4.7 percent.
"The report finds that African countries grew at a brisk pace in 2012, despite the weak global economy. Indeed, Africa's growth was twice as fast as that of the global economy. Several countries in Africa grew at rates of seven percent or higher, making them among the fastest growing countries in the world. Several African countries, Rwanda, Ethiopia, Ghana, Mozambique have been growing at strong rates for two three years. This is good for the region and these countries and shows that growth is sustained," said Punam Chuhan-Pole, a lead economist in the World Bank's Africa department.
Compared with Africa's expected growth spurt, global GDP was projected to expand by 2.4 percent in 2013 and gradually strengthen to 3 and 3.3 percent in 2014 and 2015.
The report said a decade of strong growth had reduced poverty in Sub-Saharan Africa, with provisional data showing that between 1996 and 2010, the share of Africans living on less than 1.25 US dollars a day fell from 58 percent to 48.5 percent.
But World Bank economists cautioned that high inequality and a dependence on mining and mineral exports in many countries had actually dampened the poverty-reducing effect of income growth.
"The African continent witnessed a high growth rate, approximately 5% per year, but this has not been enough in order to quickly reduce poverty. The reduction in poverty has been slow. So we must make sure that mineral wealth reaches the poorer citizens and promote agriculture," said Shanta Devarajan, the World Bank's Chief Economist for Africa.
Noting that higher growth does not automatically mean less poverty, the report said resource-rich countries such as Gabon, Equatorial Guinea, and Nigeriaperformed worse than their less resource-blessed fellows.
Food price spikes could also be a cause for concern.
Also on the risk side, the World Bank said a fragile global recovery, whether characterized 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.
It added that 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.
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