African economy to grow by 4.5 per cent
An oil terminal in southern Nigeria. A report on African economic growth has warned that the economies of resource-rich countries may slow down as their governments will inevitably have to trim spending. FILE PHOTO | PIUS UTOMI EKPEI |
What you need to know:
- Continent following in Asia’s footsteps.
- Region shrugs off effects of Ebola and low fuel prices, says latest annual report.
JOHANNESBURG
Africa’s overall economy should advance in 2015, expanding by 4.5 per cent, showing resilience despite weak commodity prices and the devastating Ebola epidemic, says an annual report published on Monday.
And future growth could be spurred by the continent’s population doubling to two billion over the next 35 years, repeating in Africa the economic boom seen in Asia’s biggest countries.
“Africa’s gross domestic product (GDP) growth is expected to strengthen to 4.5 per cent in 2015 and 5.0 per cent in 2016 after subdued expansion in 2013 (of 3.5 per cent) and 2014 (3.9 per cent),” said the report, co-authored by the Organisation for Economic Co-operation and Development (OECD), the African Development Bank and the UN Development Programme (UNDP).
The continent has so far been “relatively resilient to the sharp fall in international commodity prices,” such as crude prices, which dropped more than 50 per cent between June and January.
And if the commodity prices remain low, the report warned that the economies of resource-rich countries, such as leading oil exporters Nigeria and Angola may slow down as their governments will inevitably have to trim spending.
The latest forecast is a downward revision from projections made in 2014, which suggested Africa’s economy was going to expand by 5.7 per cent this year.
At the same time, economists noted that Africa’s increasing population could boost growth in much the same way that population booms fuelled development in China and India.
“This phenomenon may be helpful as was the case with India and China because the demographic dividends usually help growth,” OECD Development Centre director Mario Pezzini told AFP.
FAIL TO ABSORB YOUTH
But, if Africa fails to absorb the enormous youth bulge in the labour market, “then you may have very strong tensions,” he added.
An estimated 23 million youths are expected to enter the African labour market this year alone, according to the report.
Of those, four million will be in North Africa, the region that dragged down the continent’s growth rates last year, as a result of fall-out from the 2011 Arab Spring popular uprisings.
