African Economic Outlook 2011

The African Economic Outlook (AEO) is an annual publication jointly prepared and published by the AfDB, the Development Centre of the Organisation for Economic Co-operation and Development (OECD), the United Nations Development Programme (UNDP) and the United Nations Economic Commission for Africa (UNECA). The AEO has received generous financial support from the European Commission and the Committee of Ambassadors of African, Caribbean and Pacific States. The Report surveys and analyzes the economic performance of African economies and provides information on a country-by-country basis on the short to medium-term prospects on the Continent. The 2011 edition of the AEO covers 51 African countries, up from 50 countries in the previous year.

Africa´s economies have rebounded from the slump which had been caused by the global recession. In 2010, Africa´s average rate of growth amounted to 4.9%, up from 3.1% in 2009. The political events in North Africa are likely to depress the continent’s growth to 3.7% in 2011. However, this forecast is surrounded by considerable uncertainty. Risks are related to the global economy, notably the impact of the earthquake and nuclear crisis in Japan, and to Africa, in particular the development in Libya and Côte d´Ivoire and how this affects neighbouring countries. With the assumption that economic normality returns in these countries, Africa´s average growth is expected to accelerate to 5.8% in 2012. In North Africa, where economic activity has been disrupted by the political upheavals, unemployment is likely to further increase in 2011. Youth unemployment has long been a major problem in North Africa (but also in many other African countries) and contributed to the political unrest which led to the overthrow of governments in Tunisia and Egypt. Given Africa´s rapidly growing population, the demographic pressure on labour markets will continue in many African countries.

Each year, the Report addresses a specific theme that focuses on a critical, but under-researched area of Africa’s socio-economic development. The theme for 2011  is: “Africa and its Emerging Partners”. The decade that began at the onset of the new century saw emerging partners swiftly rise from a relatively marginal position to one of fully fledged partners. Africa’s trade volumes with its emerging partners have doubled in nominal value over the decade and now amount to 37% of Africa´s total trade. While China represents Africa’s leading emerging partner, having surpassed the United States in volume, the continent’s trade with its other emerging partners, taken together, is even larger than its trade with China alone. China represents more than a third of Africa’s trade with emerging partners. The EU and the US remain the most important sources of Foreign Direct Investment (FDI) for African countries.

When it comes to Official Development Assistance (ODA), traditional partners also dominate, although the share of emerging partners is growing fast. However, those are only the tip of the iceberg: emerging partners provide Africa with a range of alternative finance modalities that defy FDI and ODA definitions.