Africa’s Economic Growth Set to Strengthen in the Coming Years
Africa’s economic growth in 2007 was well above the long-term trend for the fifth consecutive year, and is expected to improve further in 2008 and 2009, says an AfDB-OECD-UNECA African Economic Outlook Report.
Maputo, Mozambique, May 11, 2008 - Africa has continued to experience high economic growth. In 2007, real GDP growth of 5.7 per cent was well above the long-term trend for the fifth consecutive year. The rate of GDP growth is expected to strengthen to about 6.0 per cent in 2008 and be maintained at that level in 2009. Also, economic growth is becoming more broad-based with more countries expected to achieve rate of GDP growth above 5.0 per cent, according to the 2007-2008 African Economic Outlook report, jointly published by the African Development Bank (AfDB), the OECD Development Centre and the UNECA and released in Maputo today.
The report notes that Africa’s recent growth performance has been supported by strong external demand for oil and non-oil minerals, increased investment in these sectors, and good weather conditions for agriculture. The report also notes that the continuation of sound macroeconomic policies in most African countries has increased business confidence leading to a general pick-up in private investment. Besides, recent initiatives such as the Multilateral Debt Relief Initiative, have created more room for increased public investment in many countries.
"Yet, the continent still needs to accelerate and sustain growth to the rate of 7 to 8 per cent to be able to achieve the Millennium Development Goal (MDG) of halving the proportion of people living in extreme poverty by 2015," says Dr. Louis Kasekende, the AfDB Chief Economist.
Dr. Kasekende also warned of the emerging inflationary pressures on African economies from the recent sharp rise in food prices. He notes that "there is a big risk to unwinding progress made by many countries in attaining the MDGs, especially the likelihood of pushing millions back into poverty, if the current high food prices persist."
The Outlook also includes a focus on a topic of high relevance for policy-makers in African countries. The 2007/2008 AEO focused on the theme: Technical Skills Development and Vocational Training in Africa. Mr. Kiichiro Fukasaku, Counsellor and Head of Regional Desks, OECD Development Centre underscored the importance and timely nature of analyzing this theme. He notes "Technological Change and Globalization are increasing the demand for a more educated and skilled workforce and that Africa needs skills training to enhance competitiveness".
The Outlook examines the theme and concludes that technical and vocational systems in Africa remain influenced by multiple constraints that limit their expansion and impact. It observes that many programmes are not adapted to the needs of the economy and the responsibility for training is fragmented among different agencies. The report, however, notes some important positive developments in Ethiopia, the Gambia, Ghana, Mauritius, Mozambique, Rwanda and South Africa. In order to improve the situation across the continent, Mr. Mahamat Abdoulahi of the ECA Trade, Finance and Economic Development Division, advised that "both governments and the private sector will need to respond to improve education, As well as train and upgrade skills of the workforce".
The launch of the African Economic Outlook report was presided over by the Ugandan Finance and Planning Minister, Dr. Ezra Suruma.