afrol News, 7 October - Africa's economic growth is now projected near levels seen before global slowdown, and next year will see even fast growth, a new continent-wide analysis reveals.
"Economic recovery is clearly under way in Africa, even in the hard-hit middle-income countries," African Department Director Antoinette Sayeh of the International Monetary Fund (IMF) said at a news conference in Washington.
Ms Sayeh, speaking to reporters ahead of the 2010 IMF-World Bank annual meetings, said the Fund expects Africa's growth to reach close to 5 percent in 2010 and strengthen further in 2011, thereby coming fairly close to regaining levels seen before the global slowdown.
The IMF analyst however cautioned that there were risks to this outlook. "Large global imbalances need to be addressed, such as those between surplus and deficit countries on the one hand, and between public and private sector-led growth on the other."
"In some parts of the world, notably emerging Asia and Latin America, the recovery is mature and self sustaining," Ms Sayeh noted. But in other regions - she was believed to point to Africa - "the recovery remains fragile and dependent on policy support."
The African Development Bank (AfDB) in its latest economic outlook for the continent is equally optimistic, and has even broken down growth expectations on a regional basis. According to the AfDB, East Africa is still noting the strongest growth rates, followed by North Africa.
In West Africa, the AfDB expects growth to be slower in 2010 than in 2008, before the crisis, but predicts a take-off for the region in 2011. Only Central Africa and, in particular, Southern Africa still struggle with the aftermaths of the crisis and will see slower growth even in 2011.
But most of sub-Saharan Africa "weathered the global economic crisis quite well," Ms Sayeh comments. Some countries, middle income countries and oil producers in particular, were harder hit. But most low-income countries had shown "a welcome resilience to the turmoil affecting much of the rest of the world," she added.
The IMF analyst said that several factors accounted for this significant resilience. "The absence of close financial integration insulated many low-income countries from the turmoil in global financial markets. And the quick rebound and continued buoyancy of commodity markets, driven not least by strong demand from Asia, also helped," she said.
"But the key explanation in our view is that many countries in sub-Saharan Africa were in a much stronger economic position going into the crisis than they had been in the past," Ms Sayeh said. Inflation and debt were at low levels, and foreign exchange reserves had been "comfortably high" in many countries.
For sub-Saharan Africa, the faster growth of emerging market countries presented "an opportunity to diversify trade and investment flows - which is already happening at an increasing pace," Ms Sayeh said. "But seizing this opportunity requires strengthening African economic competitiveness, notably by improving public infrastructure."
Ms Sayeh further noted that, against a backdrop of constrained donor budgets, it was important for sub-Saharan Africa to improve its ability to attract private financing, including for infrastructure. This would require further progress on structural reforms and improving the business environment.
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