Friday, October 19, 2007

Africa's strong growth

From The Economist:

Africa's boom is not only because of pricey commodities

The US economy may be set to slow in 2008, but Africa’s protracted economic boom is poised to accelerate from 6.1% in 2007 to 6.8% in 2008—the region's best performance since the early 1970s.
That, at least, is the forecast contained in the IMF's October 2007 World Economic Outlook. “Sub-Saharan Africa is clearly enjoying its best period of sustained growth since independence” it says, adding that while oil exporters are growing the fastest “most others" are also growing strongly and outperforming historic trends.

In the decade to 1996 the African economy grew by 2.2% a year; in the ten years to 2006 annual growth averaged more than 5%, meaning that after two decades of decline real incomes per head are now rising at over 2% annually. And while the average gap with the rest of the developing world remains very wide, African policymakers are increasingly confident that they are creating a platform for sustained growth over the next decade, during which time income gaps will start to narrow.

Beyond commodities

The IMF is at pains to stress that there is more to the African boom than the upsurge in commodity prices....

...Most African countries are forecast to maintain “relatively high” rates of growth while inflation will “generally moderate,” excluding Zimbabwe where it forecasts average inflation accelerating from 1,017% in 2006 to 16,170% this year. (There is no forecast for average inflation for the country in 2008 but the year end figure is projected--with pin point accuracy--at 137, 873.1%.)...MORE