DUBAI, 19 September 2003 — Africa should enjoy stronger growth rates next year, but devastating political instability, health crises and natural catastrophes are still undermining the continent’s economic performance, the IMF said yesterday.
In its World Economic Outlook released here, the IMF said it expects African growth to nudge up slightly this year and expand further in 2004, as the continent benefits from the global economic recovery and hikes in the prices of non-fuel commodities.
Debt relief programs and relatively high commodity prices have helped Africa’s economy to remain surprisingly robust in the face of the global economic slowdown, the International Monetary Fund (IMF) said.
“But while growth in Africa has been resilient, it clearly remains far too low,” the IMF commented. According to the IMF’s projections, growth in Africa will reach 3.7 percent in 2003, up from 3.1 percent the year earlier, and should increase further to 4.8 percent in 2004.
Despite a favorable picture in North Africa and expected rises in oil production, other parts of the region remain mired in desperate economic straits, it said.
Output is expected to slow in the Horn of Africa, with Ethiopia facing a disastrous famine.
In western Africa, activity in the former economic powerhouse Ivory Coast will contract as the country suffers from political instability following this year’s brutal civil war.
Countries in the Great Lakes region have also suffered after tourists were put off visiting usually popular destinations like Kenya by the threat of terrorism, the IMF said.
Meanwhile, growth across the continent is hampered by poor protection for property rights and the effects on life expectancy of the AIDS pandemic and tropical diseases, the IMF said. The IMF said that to meet Africa’s avowed goal of halving poverty between 1990 and 2015, “growth in sub-Saharan Africa will need to accelerate substantially to about seven percent a year, well above the rates enjoyed by the strongest performers during the past decade (about 5 percent).” The performance of regional heavyweight South Africa should improve in 2004, as the economy benefits from lower interest rates as a result of declining inflation, the IMF said.
Growth is seen at 2.2 percent in 2003, rising to 3.0 percent in 2004, the IMF said, urging South Africa to rev up its long-term growth rates to eliminate its high unemployment and poverty. Nigeria’s growth meanwhile should pick up sharply in 2003 due to higher oil prices and buoyant activity outside its oil industry.
