Continent’s growth lags far behind South Asia – African Development Bank
The African continent is still the world’s second fastest growing economic region after South Asia, according to a financial performance report released during a financial presentation at the Annual Meeting of the African Development Bank in Ahmedabad in India.
The Indian Government is a shareholder in the African Development Bank and offered to host this year’s annual meetings. This is the reason why the continent’s main development driver is holding is most important meeting offshore.
The report analyzed the continent’s economic outlook, bank operations, financial profile and capital market activities. The highlights show that Africa recorded an average GDP growth rate of 2.2% in 2016, significantly trailing South Asia’s 7.1%, driven mainly by the sterling performance in India.
The African Development Bank expects African economies to improve further to an average 3.4% growth in 2017 and 4.3% in 2018 on the strength of growing domestic demand and good performing countries.
“Although natural resources and primary commodities are still major drivers, their importance has declined while domestic factors including consumption demand play an increasing role,” the bank’s Senior Vice-President Charles Boamah said during the presentation.
Other factors include improved supply conditions, an improved business environment, prudent macroeconomic management, favourable external financial flows, and high public spending, he said.
The report notes that, while natural resources and primary commodities remain major growth drivers, their importance has declined, while domestic factors including consumption demand now play a greater role.
According to the report, East Africa emerged the best sub-regional performer with a 5.3% real GDP growth on the back of strong performances in Ethiopia, Tanzania and Djibouti.
Southern Africa recorded a 1.1% average due to the poor performance of South Africa and Angola while Madagascar and Mozambique, in contrast to the stragglers, both posted GDP growth rates exceeding 4%.
Nigeria and South Africa account for the largest share of Africa’s GDP with 29% and 19%, respectively.
“Growth prospects would further be boosted by expected increases in commodity prices, strong domestic demand, better macroeconomic governance and an improved business environment,” co-presenter and Acting Vice-President for Finance, Hassatou N’Sele, said.