Report Sees Bright Future for Africa but Warns Against Excessive Optimism

Share |

Activities preceding the 2012 annual meetings of the African Development Bank Group got underway in Arusha, Tanzania, on Monday, with the launch of "The African Economic Outlook" a flagship compendium of data on 53 African countries jointly published by the AfDB, the OECD, the UNDP and the UN Economic Commission for Africa.

According to the 291-page report, Africa’s economic growth will reach 4.5 percent in 2012; and 4.8 percent in 2013.

Africa's economy grew 3.4 percent in 2011, with North Africa recording 0.5 percent growth compared to sub-Saharan Africa’s over 5 percent growth in that year.

"The economic outlook for Africa remains optimistic. Natural resource-rich economies are expected to do better than more mature emerging economies," The African Economic Outlook said.

The report attributes growth to natural resources exports, migrant remittances and good economic policies maintained by some of the continent’s countries, aided by good weather and relative stability in the international market.

However, it warned that the crisis in Europe which is Africa’s premier economic and trading partner could undermine demand for exports.

"The continued economic crisis in the euro area may reduce demand for African exports, while lowering external resource inflows," it said.

In the same vein, AfDB President, Donald Kaberuka, commended African countries for maintaining growth, but urged caution given the uncertain external environment.

"I appeal for caution and not to show excessive optimism with regard to the continent's economic growth, because there are other issues that need to be considered carefully," the President said at the report’s launching ceremony.

According to the President of the AfDB, the slowdown in emerging markets and political crises in Africa in recent months are all factors that should prompt consideration of the current economic situation of the continent with caution.

He cited the case of Mali which the report’s indicators scored highly but which is facing deep political crisis in recent months following the overthrow of the government by the military.

Mr. Kaberuka commended the "dynamism" of the economies of East Africa including Rwanda and the United Republic of Tanzania, noting that the real challenge for Africa now is to use the proceeds of growth to transform their economies and create wealth.

"The youth is the most important wealth of Africa," Mr. Kaberuka said, urging African leaders to invest more in education.

The report, developed around the theme,  “Promoting Youth Employment,” notes that  “With the number of youths in Africa set to double by 2045, countries across the continent should boost job creation and help young people acquire new skills.”