Sub-Saharan Africa’s growing economy
Evidently, the economy of Sub-Saharan Africa is moving progressively on growth path, accounting for the impressive performance of the economy as shown in the rise to the predicted 5.2 percent growth in 2014 from 4.7 percent in 2013.
The drivers of this growth and performance are not far-fetched. World Bank’s new Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects, puts it succinctly that this performance is boosted by rising investment in natural resources and infrastructure, and strong household spending,
It gladdens the heart to note that, on account of demographics and growing sophistication of its emerging middle class, household spending in Nigeria has been quite strong, leading to observable growth in the real estate sector which has attracted considerable investment in retail space and hotel accommodation.
Growth is notably buoyant in resource-rich countries, including Sierra Leone and the Democratic Republic of Congo. It remains steady in Cote d’Ivoire, while rebounding in Mali, supported by improved political stability and security. Non-resource-rich countries, particularly Ethiopia and Rwanda, also experienced solid economic growth in 2013.
Capital flows to this region has continued to rise, reaching an estimated 5.3 percent of regional GDP in 2013, significantly above the developing-country average of 3.9 percent. Net foreign direct investment (FDI) inflows to the region grew 16 percent to a near-record $43 billion in 2013, boosted by new oil and gas discoveries in many countries, including Angola, Mozambique, and Tanzania.
Other growth areas were made possible by lower international food and fuel prices, and prudent monetary policy which slowed inflation that was growing at an annual rate of 6.3 percent in 2013, compared with 10.7 percent a year ago. Countries like Ghana and Malawi have seen an uptick in inflation because of depreciating currencies.
Remittances to the region grew 6.2 percent to $32 billion in 2013, exceeding the record of $30 billion reached in 2011. These inflows, combined with lower food prices, boosted household real income and spending.
Tourism also grew notably in 2013, helping to support the balance of payments of many countries in the region. According to the UN World Tourism Organisation, international tourist arrivals in Sub-Saharan Africa grew by 5.2 percent in 2013, reaching a record 36 million, up from 34 million in 2012, contributing to government revenue, private incomes, and jobs.
These are positive and welcome developments and we see hope for this region that today stands tall as a major beneficiary of the cooling and softening in the economy of the Western World.
Africa as a whole is seen as a green field by international investors. The continent now dominates the list of the fastest growing economies in the world, such that in a list of the top 10 world economies, at least, six including countries like Nigeria, Ghana, Mozambique, Zambia, Ethiopia, Tanzania and Congo are African countries.
We also see great future for the continent and particularly for the SSA region, just as we see limitless opportunities that could, if well harnessed, transform and catapult this region to an unrivalled competitiveness in the global economy.
We however, urge those who manage the affairs of this region to do the needful in other to optimise these opportunities. To achieve this, human capital development is critical and that is why we share the view of Makhtar Diop, the World Bank Group’s vice president for Africa, that high-quality university programmes in Africa, particularly in areas such as the applied sciences, technology, and engineering, could dramatically increase the region’s competitiveness, productivity and growth.
Poor physical infrastructure has been a major disincentive to doing business in this region and, in our view; it will continue to limit the region’s growth potential. More infrastructure spending is, therefore, needed in the region if the countries are to achieve a lasting transformation of their economies.
Africa’s Pulse says the region’s infrastructure deficit is most acute in energy and roads and that across Africa, unreliable and expensive electricity supply, and poor road conditions continue to impose high costs on business and intra-regional trade. For us, nothing could be truer, and we agree totally.