WASHINGTON –– Economic activity in sub- Saharan Africa remained robust in 2013, highlighting a significant increase in capital inflows and net direct foreign investment (FDI) inflows, the World Bank said in a report on Monday.
In its latest Africa’s Pulse report highlighting the continent’s economic prospects, the World Bank said the growth was essentially supported by the rising investment in natural resources, infrastructure and a robust private consumption.
“Economic growth continued to rise from 4.7 percent in 2013 to a forecasted 5.2 percent in 2014.
Capital inflows also reached an estimate 5.3 percent of regional GDP while net FDI investment in the region expanded more than 30- fold in the last 20 years, boosted by new oil discoveries in many African countries including Angola and Mozambique,” said the report.
The report, however, noted that although a number of African countries are expected to remain stronger than many other developing countries worldwide, a sharper decline in commodity prices, political uncertainty and poor physical investment will continue to inhibit the continent’s growth potential.
“Political uncertainty, unreliable and expensive electricity supply and poor road conditions continue to impose high costs on business and intra-regional trade therefore, significantly more infrastructure spending is needed in most countries in the region if they are to achieve a lasting transformation,” said the report.
In many African countries, deficiencies in infrastructure hold back per capita growth by at least one percent every year.
Infrastructure limitations, particularly in power, depress productivity at least as much as red tape and corruption.
The report also forecasts that mid-term growth prospects for Africa will remain strong and will be supported by consistent high commodity prices and more investment in infrastructure, education and trade.
The World Bank vice-president for Africa, Makhtar Diop, said strategic reforms are needed to expand young people’s access to high quality university education programmes in Africa which could dramatically increase the region’s competitiveness, productivity and growth.
“Science based education can ensure that students graduate with cutting edge knowledge that is relevant and meets the needs of the continent,” said Diop.
The report also suggests that large-scale migration of people from the countryside into towns and cities, resulting from Africa’s fast-growing population will set the continent on a high economic growth path.
Also, it projected Africa’s GDP growth to reach 5.4 percent in 2015, highlighting favourable midterm growth prospects for sub Saharan Africa while cautioning against the global financial turbulence in 2013 which underscored the need for reforms to reduce fiscal and external imbalances. –– Staff Writer