Economic gains in Africa to rise 5.5%

Economic growth in sub-Saharan Africa is projected to rise to 5.5% over the year from 4.9% in 2013, according to a new report from the International Monetary Fund (IMF). Economic activity in the region continues to be underpinned by large investments in infrastructure, mining and maturing investments, said the IMF’s Regional Economic Outlook for Sub Saharan Africa.

The report noted that “a significant share” of sub-Saharan Africa’s trade is now taking place with emerging markets. One-third of non-oil exports of the region now go to the BRICS group of countries (Brazil, Russia, India, and China) compared with less than 10% a decade ago. “Apart from the direct demand channel, growth in the BRICs, notably China, has fuelled growth in sub-Saharan Africa through high commodity prices and investment inflows,” the report added.

Growth in middle-income countries is projected to increase by about 0.3 percentage points in 2014 and accelerate further in 2015 – helped by sustained exports, especially to advanced economies, in addition to “ongoing investments and improved business confidence”.

The report said growth in South Africa is set to improve “modestly”, supported by strengthening external demand but “dragged by tightening global financial conditions and domestic monetary policies, soft commodity prices, tense industrial relations and continuing supply bottlenecks, including in energy”.

According to the IMF, growth is expected to remain strong or accelerate in other countries with the help of “massive investments in infrastructure” (in Ethiopia), mining (in Liberia, Mozambique, and Uganda), improved transportation (Mozambique) and expanded productive capacity in the energy sector (Ethiopia, Tanzania) and mining (Democratic Republic of Congo, Ghana, Mozambique, Niger and Sierra Leone).