The chapter examines the recent macroeconomic developments in Africa and provides a forecast for 2013 and 2014. This is based on detailed country analysis and projections as described in Part Three of this report. The chapter looks at the demand and supply conditions which are affecting Africa’s growth. It also describes the development of commodity prices and inflationary pressures in African countries and discusses how monetary and fiscal policies have responded to the various challenges.
The economic outlook for Africa remains favourable despite headwinds from the global economy. Growth has remained relatively broad-based, with oil production, mining, agriculture, services and domestic demand as the main drivers, mitigating the adverse effects from global turbulences. But growth has remained subdued in several countries due to poor export performances and political and social tensions. On average, and excluding the distortions by volatile gross domestic product (GDP) developments in Libya, Africa’s economic growth was 4.2% in 2012 and is projected to accelerate to 4.5% in 2013 and further to 5.2% in 2014. This forecast assumes a gradual improvement of global economic conditions.
External financial flows into Africa hit a record in 2012 and are expected to top USD 200 billion in 2013. This highlights the growing importance of investment, official development aid and remittances to a continent on the move. This chapter puts the spotlight on emerging financial trends that Africa can take advantage of and the risks they face.
China, India and Brazil are consuming more and more of Africa’s oil, commodities and manufactured goods. The emerging economies are steadily eating into the lion’s share of the African export market held by Europe and the United States. Africa is also seeking to push regional integration to improve its trading prospects, but the going has not been easy. This chapter explains how Africa’s export trade has changed and what still needs to change.
Africa’s human development – expanding the choices of its people and giving them a chance to lead full lives – has improved but is still struggling against inequality and low investment in the continent’s population. Africa’s natural resource wealth can be used for economic diversification to improve people’s lives and this chapter argues that good practices exist and policies can be designed to advance sustainable human development.
There are more elections in Africa than ever before, but the intensity of protests across Africa in 2012 was almost the same as the landmark Arab Spring year. North African countries remain tense, while people in many sub-Saharan states worry about jobs and the cost of living. This chapter reveals the African Economic Outlook’s annual indicators on civil protests and political freedoms and sets out the trends behind them.