Wednesday, 11 June 2014

Why Africa grew by 6 per cent in 2013, WB


STRONG DOMESTIC DEMAND drove Africa’s GDP growth last year. Sub-Saharan Africa’s GDP, excluding South Africa grew by 6 per cent. However, when the sluggish South Africa economy is included, GDP grew by 4.7 per cent says the World Bank’s Global Economic Prospects.  The Bank expects GDP to remain growth rate to hold and 4.7 per cent in 2014 and rise expected 5.1 per cent in 2015.

South Africa, Africa’s second largest economy grew by a paltry 1.9 per cent in 2013. This was mainly due to structural bottlenecks, tense labour relations and low consumer and investor confidence.

The World Bank stated that GDP growth projections in the region in 2015 and 2016 are expected to be supported by firming external demand and investments in natural resources, infrastructure, and agricultural production.

East Africa is expected to drive the strong growth in Sub-Saharan Africa “due to supported by Foreign Direct Investment flows into offshore natural gas resources in Tanzania, and the onset of oil production in Uganda and Kenya,” it said.

 Natural resources have placed the east Africa in the forefront of an expected PPP boom as they invest heavily on infrastructure. The region needs an estimated $10-13 billion a year to spend on infrastructure up to 2020.

Kenya is a front-runner in the respect with some three or four major projects to write home about. These include; the Aga Khan Nairobi Hospital (2010), Olkaria III Geothermal Phase II Power Project (2009) and Expansion Project (2011), and the approximate $900 million Lake Turkana Wind Power Project (2014. The country is also expecting to generate an estimated 400MW of geothermal power from Menengai wells through PPP.  This is a case study of success not only in East African community but also for sub-Saharan Africa. The country still requires an estimated $4 – $5 billion per year through 2020.


Tanzania is home to various minerals, including gold, diamonds and coal, but the sector has not witnessed expected growth. Furthermore Tanzania’s natural gas boom has, in part, been overshadowed by the one south to it in Mozambique and, in part, subdued by the country’s mass infrastructural challenges across all sectors. The country requires an estimated $6 – $8 billion to keep up with expected infrastructure needs through 2020.

2 comments:

  1. Great article.

    John Kornet
    Founder of Frontier Markets Compendium

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