Economic growth in sub-Saharan Africa is likely to reach more than 5% on average between 2013 and 2015 as a result of high commodity prices worldwide and strong consumer spending on the continent, ensuring that the region remains among the fastest growing in the world.
In 2012, about 25% of countries on the African continent grew at 7% or higher and a number of countries, including Sierra Leone, Niger, Cote d’Ivoire, Liberia, Ethiopia, Burkina Faso and Rwanda, are among the fastest-growing economic countries in the world.
Forecasts indicate that medium-term growth prospects remain strong and will be supported by a gradually improving world economy, consistently high commodity prices, and more investment in regional infrastructure, trade and business growth.
The need for faster progress in areas such as electricity and food in vulnerable areas of The Sahel and the Horn of Africa, as well as significantly more energy and agricultural productivity are desperately needed to attempt to raise the quality of life for Africans throughout the continent and reduce poverty significantly.
Specifically, without additional focus on electricity and higher agricultural productivity, Africa’s development future cannot prosper at the rate needed to address the still high levels of poverty and inequality within the continent.
African governments should be continued to be pressured to upgrade their specific country’s capacities so that their citizens can better measure and monitor their development progress and analyse the reasons for its success and failure, especially in resource-rich countries and fragile states.
The recent discoveries of oil, natural gas, copper and other strategic minerals, and the expansion of several mines or the building of new ones in Mozambique, Niger, Sierra Leone and Zambia, together with better political and economic governance, were sustaining solid economic growth across the continent and bodes well for the future, if managed correctly.
It is also forecast that by 2020, only four or five countries in the region will not be involved in mineral exploitation of some kind, such is our continents abundance of natural resources.
According to the World Bank, given the considerable amounts of new mineral revenues coming on stream across the region, resource-rich African countries will consciously need to invest these new earnings in better health, education and jobs, and less poverty for their people in order to maximise their national development prospects.
Increased investment flows into Africa are also supporting the continent’s growth performance.
In 2012, net private capital flows to the region increased by 3.3% to a record $54.5 billion and foreign direct investment inflows to the region increased by 5.5% in 2012 to $37.7 billion.
Exports are also driving the continent’s growth and that the traditional destination of these goods over the last decade is changing as well.
Since 2000, the overall growth of African exports to emerging markets, including those of China, Brazil and India, and to countries in the region has surpassed that to developed markets. Total exports to Brazil, India and China were larger than to the EU market in 2011.
However, even after more than a decade of strong economic growth, Africa has been able to cut levels of poverty on the continent sufficiently.
Even though the broad picture emerging from the data is that Africa’s economies have been expanding robustly and that poverty is coming down, the aggregate hides a great deal of diversity in performance, even among Africa’s faster growers.
As an example of this trend, Ethiopia and Rwanda saw their economies expand between 8% and 10%, which directly resulted in a 1.3% to 1.7% annual drop in their national poverty rates. In contrast, poverty reduction in some other countries has lagged far behind growth.
A number of emerging trends on the continent could help to transform its current state of development over the coming years. These include the promise of large revenues from mineral exploitation, rising incomes created by a dramatic expansion of agricultural productivity, the large-scale migration of people from the countryside into Africa’s towns and cities, and a demographic dividend potentially created by Africa’s fast-growing population of young people.