Africa is growing but there are risks
Africa´s economies are recovering, mainly driven by higher commodity prices and export volumes. The global financial and economic crisis of 2008/2009 had interrupted the period of high growth, with Africa´s GDP growth halving from an average annual rate of around 6% in the years prior to the crisis to 3.1% in 2009. Since then Africa´s economic climate has, in general, improved significantly, and expectations have overall been favourable. In 2010 Africa´s average rate of growth amounted to 4.9%, but due to the political events in North Africa the continent’s growth will be depressed to 3.7% in 2011. At the time of writing there was, however, still considerable uncertainty about developments in several countries, notably in Libya and Côte d'Ivoire, and thus also about the overall effect of these events on Africa´s growth. With the assumption that economic normality returns, Africa´s average growth is expected to accelerate to 5.8% in 2012 (see Figures 1.1 and 1.2 and Box 1.1). (The detailed macroeconomic forecast for Africa and its regional groupings is presented in Table A.1 at the end of this chapter).
Figure 1.2: Africa´s current economic situation and expectations for the next six months
This forecast for Africa is based on the assumption that the world economy will continue to expand, but at a more moderate pace than in 2010 (see Box 1.2)
Box 1.1. Economic climate indicator for Africa
The economic climate indicators as shown in Figure 1.2 for Africa are from the Ifo World Economic Survey (WES). This survey is conducted by the German Ifo Institute for Economic Research Munich in co-operation with the International Chamber of Commerce (ICC) in Paris and, for Africa, in co-operation with the African Development Bank. Every three months it assesses global economic trends by polling economic experts world wide about current economic developments in their respective countries. This allows for a rapid, up-to-date assessment of the economic situation prevailing around the world. The survey questionnaire focuses on qualitative information: on assessment of a country’s general economic situation and expectations regarding important economic indicators. It has proved to be a useful tool because it reveals economic changes earlier than do traditional economic statistics. Africa´s coverage in the survey has recently been extended, and it now includes 34 countries, although in some countries with only a few participants. The WES plans to further improve the country coverage in Africa and also the number of participants in Arican countries.
Given Africa´s population growth of above 2%, GDP per capita is expected to increase on average by 1.4% in 2011 and 3.5% in 2012, after less than 1% in 2009. While the acceleration of per capita growth is commendable, in 2011 it will not be sufficient to significantly reduce poverty. Income per capita growth will be too low in many countries, notably in countries that suffer from terms of trade losses due to higher import prices for food and energy. This is currently the case in resource-poor countries, while resource-rich countries benefit from terms of trade gains, so that real income of resource-rich countries increases faster than real output (see Figures 1.3 and 1.4).1 Furthermore, in many countries, notably resource-rich countries, income and wealth are unequally shared, and stronger average income growth does not necessarily reduce poverty.
Figure 1.3: Terms of trade in selected resource-rich countries
Figure 1.4: Terms of trade in selected resource-poor countries
Useful links
- African Development Bank
- OECD Development Centre
- OECD
- Proparco's magazine - Private Sector and Development
- UNECA
- UNDP Africa bureau
- United Nations
- World Bank
