Africa’s economic growth set to pass 5%

8 Oct 14
Economic growth in Africa could exceed 5% in 2015/16, but Ebola and terrorism are a downside risk, the World Bank has said.

Economies in the continent continued to rise at a moderately quick pace with regional growth estimated to strengthen to 5.2% in the next two years, from 4.6% in 2014, said the Bank.

Francisco Ferreira, the World Bank’s chief economist for Africa, said the continent is projected to remain one of the world’s three fastest growing regions, and to maintain ‘its impressive 20 years of continuous expansion’.

But, he added: ‘Downside risks that require enhanced preparedness include rising fiscal deficits in a number of countries, economic fallouts from the activities of terrorist groups such as Boko Haram and Al Shabaab and, most urgently, the onslaught of the Ebola epidemic in West Africa.’

The bank said it expected significant investment in infrastructure, increased agricultural production and expanding services in African retail, telecoms and transportation to continue to boost the growth in the region.

Meanwhile, a separate World Bank study, Africa’s pulse, noted that economic transformation would become more critical, as it found the region ‘was largely bypassing industrialisation as a major driver of growth and jobs’.

Instead, the study said, extractive industries in the natural resources sector and a surging services industry were behind Africa’s growth.

Co-author of Africa’s Pulse and World Bank lead economist for Africa, Punam Chuhan-Pole, added: ‘Nearly two decades of strong growth is transforming Africa’s economies, but the structural change is not what the world expected.

‘The majority of Africa’s jobs continue to be in agriculture and is surging into services - but not into industry and manufacturing. The good news is that in Africa this growth in agriculture and the services sector has been more effective in reducing poverty than growth in industry. In the rest of the world, by contrast, industry and services have a larger impact on reducing poverty.’

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