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East Africa will bounce back to be the continent’s fastest growing region this year and next, according to the African Development Bank’s projections.
The average real growth in gross domestic product for 13 economies in the region is expected to accelerate to 4,9 percent this year and 5,7 percent in 2025, the Abidjan-based lender said in a report published on Thursday. That’s despite likely contractions in Sudan and South Sudan due to an ongoing conflict in the oil-producing countries.
Growth will be driven by “strong government spending and strategic investments to improve in-country connectivity and facilitate trade with neighbouring nations, coupled with ongoing efforts to modernise agricultural production and boost productivity in the services sector,” according to the report.
Africa’s economic growth is seen averaging 4 percent this year and next, helping the continent retain its ranking as the fastest-growing region in the world after Asia.
About 40 countries in Africa will post higher growth this year, with 17 economies projected to expand by more than 5 percent, and the number could rise to 24 the following year, the AfDB said.
West Africa will be second with 4,2 percent growth this year, followed by Central Africa at 4,1 percent, and North Africa at 3,6 percent. Southern Africa will be the laggard at 2,2 percent.
Key risks to growth include persistent inflationary pressures and higher commodity prices that could ignite a new wave of price increases and upend the decline in poverty and delay monetary easing. Climate shocks are a key risk to Africa’s recovery with extreme weather conditions such as flooding in the east and drought in the south hurting economies, the lender said. – Bloomberg
Peter Tanyanyiwa
Online Reporter