In its Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects, the World Bank says capital flows to sub-Saharan Africa continued to rise, reaching an estimated 5.3 per cent of regional GDP in 2013, significantly above the developing-country average of 3.9 per cent.
It says net foreign direct investment (FDI) inflows to the region grew 16 per cent to a near-record U$43 billion in 2013, boosted by new oil and gas discoveries in many countries including Angola, Mozambique and Tanzania.
Growth was notably buoyant in resource-rich countries, including Sierra Leone and the Democratic Republic of Congo (DRC).
It remained steady in Cote d’Ivoire, while rebounding in Mali, supported by improved political stability and security. According to the report, non-resource-rich countries, particularly Ethiopia and Rwanda, also experienced solid economic growth in 2013.
New oil and gas discoveries in East African countries including Angola, Mozambique and Tanzania has boosted growth projections due to growing FDI.
For Tanzania, growth is projected to reach 7 per cent in 2014 while Kenya and Uganda are expected to register 5.7 per cent and 6 per cent growth for 2014 respectively.
Household real incomes and spending in the region has been boosted increased remittances and lower food prices, the report says.
Remittances to the region grew 6.2 per cent to $32 billion in 2013, exceeding the record of $30 billion reached in 2011. Inflation slowed in the region due to lower international food and fuel prices and prudent monetary policy.
It grew at an annual rate of 6.3 per cent in 2013, compared with 10.7 per cent a year ago. The World Bank’s Vice- President for Africa, Makhtar Diop said a number of African countries were now routinely among the world’s fastestgrowing countries as a result of sound macroeconomic reforms in recent years.
He said the rest of the world had steadily updated its reality of the continent as a high opportunity region for trade, investment, business, science and technology and tourism.
He, however, cautioned that a chronic energy deficit and poor transport links continued to curb growth levels regionally.
“Poor physical infrastructure will, however, continue to limit the region’s growth potential. Significantly more infrastructure spending is needed in most countries in the region if they are to achieve a lasting transformation of their economies.”