Africa is making a “spectacular” recovery from the global recession thanks to decades of market reform and strong trade ties with China, the chief economist for the African Development Bank said Tuesday.
Mthuli Ncube, presenting the annual economic forecast of the multilateral bank dedicated to alleviating poverty and boosting growth in Africa, predicted a 4.5 percent growth rate for the continent’s economies this year. The bank looks ahead to more than 5 percent growth next year, and soon back to the average of about 6 percent Africa enjoyed between 2006 and 2008. Growth was just 2.5 percent last year.
But Ncube says recovery could be threatened if Europe — to which many African economies are closely linked — fails to bounce back. Other threats include the possibility of political or social tension and problems created by years of poor investment in infrastructure.
Ncube’s assessment is one of several to take note of how a continent usually associated with poverty and economic collapse has weathered the international crisis.
A report last month from the consulting firm McKinsey & Company concluded that “global business cannot afford to ignore the potential” of Africa, and lauded its governments for acting in recent years “to end political conflicts, improve macroeconomic conditions and create better business climates.”
A recent World Bank assessment also concluded Africa was rebounding from the global crisis, and poverty was slowly decreasing after “a decade of improvements in governance, favorable commodity prices, better macroeconomic policies, higher investments in human development, health care and education.”
The optimism about Africa comes amid concerns recovery is still fragile in Europe and the United States.
The African Development Bank’s Ncube, a Cambridge-trained former investment banker, said that because of years of reforms, African governments had budget surpluses they were able to use to respond to the global crisis. He also cited a move from rigid to more flexible stances on exchange rates.
“There’s been a spectacular recovery,” he said. “Africa … is the fastest growing region out of the crisis.”
He said the crisis had underlined the vulnerability of countries that depend on exporting commodities like oil and minerals. Oil-rich Angola and diamond-rich Botswana were hit hard. Ncube called East Africa the continent’s growth engine, and celebrated innovative ideas there like using cell phones to transfer capital to entrepreneurs in Kenya and transmitting world prices to coffee growers in Ethiopia by setting up TV screens in rural areas.
On China, he acknowledged concerns about an authoritarian power working closely with African dictators. But he said China has been a strong trade and investment partner for Africa, and that its growing consumer market will be important to global growth.
“China is giving Africa what it needs,” Ncube said. “China is giving the world what it needs.”
Source: The Associated Press.