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Oil and gas discoveries in sub Saharan Africa are expected to drive growth in coming years. [PHOTO: FILE] |
By WINSLEY MASESE
Sub-Saharan Africa economies, Kenya included, are poised to register 5.2 per cent economic growth, compared to 4.7 per cent reported in 2013.
According to Africa’s Pulse, a World Bank report, the growth is largely driven by increased investment in natural resource finds such as oil and gas and infrastructure expansion. These are also the areas in which Kenya has made substantive progress.
The growth, which is set to remain robust for the second decade running, has seen the continent defined as the next economic frontier, registering six out of the ten fastest economies globally. “Although Sub-Saharan Africa’s exports remain concentrated in a few strategic commodities, the region’s countries have made substantial progress in diversifying their trading partners,” said Francisco Ferreira, Chief Economist World Bank African region.
Net foreign direct investment (FDI) into the region jumped 16 per cent to a near-record $43 billion (Sh370 billion) as foreign firms exploited hydrocarbon finds, including those in East Africa where massive gas finds have been made in Tanzania, and in Kenya where commercial quantities of oil have been struck. “FDI flows are expected to be lower in 2014 due to weaker commodity prices and slower growth in emerging markets. Still, new discoveries of oil, gas and metals are expected to attract substantial FDI flows to the region,” the bank said.
IMPROVED EXPORTS
Kenya for example has embarked on various initiatives to market itself as a tourist destination in the Far East as opposed to the traditional West.Ferreira noted that the region has witnessed improved exports to Brics - Brazil, Russia, India and China, more than the European Union.“Poor physical infrastructure will...continue to limit the region’s growth potential,” Makhtar Diop, the World Bank’s vice president for Africa, added in a statement. During a video-conferencing press briefing from the institution’s head office in Washington DC, Punam Chuhan Pole, lead economist of the World Bank’s Africa Region said that the rebound in growth will also be boosted by the service sector.
“The service sector has huge potential to improve the country’s economic prospects if its potential is unlocked,” Punam stated. She noted that services require skills and there is potential for countries to tap into them due to their ability to move across the global market.