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North African economy stagnates as a result of instability and uncertainty
North Africa’s economies have suffered near stagnation as a result of the political instability in the early months of 2011.
This was one of the conclusions of the tenth edition of the African Economic Outlook (‘Outlook’) launched at the Annual Meetings of the African Development Bank Group (AfDB) in Lisbon on 6 June 2011.
The events in North Africa plus other factors also affected the continent’s overall prospects Africa’s economic growth is forecast to decline to 3.7 percent in 2011, compared to growth of 4.9 percent in 2010. The 2010 figure was an improvement on the 3.1 percent rise in 2009, which had been depressed by the global economic crisis.
However, the political events in North Africa hit the region’s economy hard. Together with the related uncertainty, the mass demonstrations and large-scale strikes led to production losses, and the adverse security situation harmed tourism, a major earner of export earnings in Tunisia and Egypt.
In Libya, the troubles there caused a double-digit fall in oil production and aggregate output.
As a result, the Outlook forecasts that growth in North Africa will slow down to less than 1 percent in 2011, compared to 4.7 percent in 2010.
The theme of this year’s edition of the Outlook is “New Partners for Africa”, and outlines the new economic bonds Africa has formed with emerging countries from around the world.
China overtook the United States as Africa’s number one trading partner in 2009. The share of trade conducted by Africa with emerging partners has grown to 39 percent from 23 percent over the last decade.
Africa’s top five emerging trade partners are now China (38 percent), India (14 percent), Korea (7.2 percent), Brazil (7.1 percent) and Turkey (6.5 percent).
Trading with these new partners is promising for Africa’s future, said the AfDB’s Chief Economist, Mr Mthuli Ncube.
In Lisbon, Mr Mario Pezzini, director of the OECD Development Centre, added: “Emerging partners have become a major driver of economic growth”.
The Outlook reveals that, in 2010, economic expansion in resource-rich African countries was above average as they benefited from the post-financial crisis revival in commodity demand, oil and non-oil commodity prices, and in trade.
However, North Africa is expected to be the only region in Africa to suffer lower growth in 2011 year-on-year.
The Outlook is a joint publication created by the AfDB, the OECD, the United Nations Economic Commission for Africa, and the United Nations Development Programme.