Washington D.C. — Economic growth in Sub-Saharan Africa remains strong and is poised for lift-off after growing at 4.9 percent in 2011, just shy of the pre-crisis average of 5 percent. Excluding South Africa, which accounts for over a third of the region’s GDP, growth in the rest of region was 5.9 percent, making it one of the fastest growing developing regions, according to a new World Bank report on Africa’s economy.
Over a third of countries in the region attained growth rates of at least 6 percent, with another 40 percent growing between 4 - 6 percent. Among fast- growing economies in 2011 were resource-rich countries such as Ghana, Mozambique, and Nigeria, as well as other economies such as Rwanda and Ethiopia, all posting growth rates of at least 7 percent in 2011.
“In view of the turbulence that has beset the global economy in the last five years, many would be right to think that the prospects for Africa are terrible. But as this issue of Africa’s Pulse shows, African economies continue to show resilience and some of the fastest-growing economies in the world are now in Africa. The urgent agenda remains sustaining the macroeconomic reforms while accelerating the structural reforms that will deliver the right quality of growth that creates jobs and raises incomes on the continent,” says Obiageli ‘Oby’ Ezekwesili, The World Bank’s Vice President for Africa, and a former Nigerian Minister of Mineral Resources.
Tourism slows but private investment up
The latest Africa’s Pulse reports that the weakening global economy in the second half of 2011 affected tourist arrivals. For the year, tourist arrivals in Sub-Saharan Africa were up by 6.2 percent, higher than the global average of 4.4 percent, but lower than the 9.6 percent recorded for the region in 2010, when it benefitted from hosting of the World Cup. Tourism arrivals from Europe saw a decline in major destination markets such as Mauritius.
In a significant development, the World Bank says that overall capital flows to Sub-Saharan Africa rose by $8 billion in 2011 to $48.2 billion. Foreign direct investment, which accounts for about 77 percent of all capital flows to the region, contributed to about 83 percent of the increase.
Recent foreign direct investment to the region has been spurred by increased global competition for natural resources, higher commodity prices, robust economic growth and a fast rising middle class. The region is increasingly being recognized as an investment destination, including from private equity investors.
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