World Bank optimistic about Africa's economic growth despite challenges

NAIROBI, KENYA: Significant public investment in infrastructure, increased agricultural production and expanding services in Africa's retail, telecoms, transportation and finance sectors are expected to continue to boost growth in the continent.

This increase in growth is expected to occur despite lower commodity prices and lower foreign direct investment as a result of subdued global economic conditions, according to the World Bank's new Africa's Pulse report.

The report indicates regional Gross Domestic Product (GDP) growth is projected to strengthen to 5.2 per cent yearly between 2015 and 16 from 4.6 per cent in 2014.

Africa's Pulse, a twice-yearly analysis of the issues shaping Africa's economic prospects, indicates that commodity prices remain highly significant to Africa's outlook. Primary commodities continue to account for three-quarters of Sub-Saharan Africa's total goods exports.

"The share of the region's top five exports in total exports climbed to 60 per cent in 2013 from 41 per cent in 1995," the report noted.

World Bank's Chief Economist for Africa Francisco Ferreira noted that overall, Africa is forecast to remain one of the world's three fastest growing regions and to maintain its impressive 20 years of continuous expansion.

"Downside risks that require enhanced preparedness include rising fiscal deficits, economic fall-outs from the activities of terrorist groups such as Boko Haram and Al-Shabaab and, most urgently, the onslaught of the Ebola epidemic in West Africa," he said.

In a study of patterns of structural transformation and poverty dynamics, the report finds that Africa is largely bypassing industrialisation as a major driver of growth and jobs.