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Sustainable Development: Recent Economic Developments in Africa
Posted Mar 18, 2004 - 04:27 PM
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Recent Economic Developments
in Africa
Of the 53 countries in Africa, only 5 achieved the 7% growth rate in 2002 required
to meet the Millennium Development Goals, 43 had growth below 7%, and 5 registered
negative growth (table 1.2 and figure 1.4). For the region as a whole, real
GDP grew 3.2% in 2002, compared with 4.3% in 2001.
Growth slows in regional
powerhouses
The slowdown in regional growth is due to slower growth in four of the five
largest
economies in the region of which only Nigeria is from sub-sahara
South Africa, which accounts for
about 35% of the GDP of the five largest economies
in Africa, grew 3% in 2002, up from 2.5% in 2001. This weak performance despite
recent increases in the prices of its export commodities, particularly gold,
is due in part
to sluggish growth in the euro area. In addition, the appreciation of the rand
against
the dollar in the second and third quarters reduced the competitiveness of South
African exports. And the South African Reserve Bank tightened monetary policy
on
a number of occasions to reduce inflationary pressures.
Southern
Africa grew faster than the other subregions
With the exception
of Southern Africa, growth slipped in all subregions—by 3 percentage points
in the north, 0.4 in the west, 0.5 in the east, and 1.5 in the centre (figure
1.5).
In West Africa the decline is due
in part to slower growth in Nigeria—the largest
economy in the subregion—from 4% in 2001 to 2.6% in 2002. Reductions in
the
pace of economic activity in Burkina Faso, Guinea-Bissau, Niger, Senegal, and
Sierra Leone also contributed.
• In East Africa a 3.5% decline in Madagascar, coupled with modest declines
in
Djibouti, Ethiopia, Kenya, Somalia, and Tanzania, contributed to the slowdown.
• In Central Africa the slowdown is due largely to declines in Equatorial
Guinea
(from 66.1% to 24.4%), Congo (from 2.9% to 1.7%), and Cameroon (from 5.2%
to 4.9%). For the second year in a row, Equatorial Guinea is the fastest growing
economy in Africa, thanks to oil and gas.
• In Southern Africa growth increased from 2.4% in 2001 to 3.3% in 2002,
largely
reflecting improvements in South Africa, Angola, Lesotho, and Namibia.
Medium-term prospects—mixed
In the near term, growth prospects for African countries will depend mainly
on the
strength of the recovery in global economic activity, the outlook for commodity
prices,
the progress in reducing political and armed conflicts, and the commitment of
African
leaders to macroeconomic stability and the principles of good governance.
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