Sub-Saharan Africa’s economy will probably expand 5.1 percent this year, with the outlook for growth “quite positive” as bumper harvests help to offset rising food prices and investment recovers, a senior World Bank official said.
“Africa has rebounded quite quickly after the global economic crisis,” Shantayanan Devarajan, chief economist for Africa at the World Bank, said in an interview in Cape Town while attending the World Economic Forum on Africa.
While food and fuel price increases are “serious risks” to the outlook, improved harvests in many countries are providing a “cushion” and African governments have better economic policies in place to mitigate the impact, Devarajan said. Africa is also being partly sheltered by surging wheat prices because of its reliance on rice, millet and other cereals as staples, he said.
“The policies that African countries put in place at the last crisis are beginning to pay off, so now farmers are getting more of the increase in prices into their pockets thanks to better infrastructure and better marketing,” Devarajan said.
The World Bank’s growth outlook for the region is lower than the International Monetary Fund, which estimated in last month’s World Economic Outlook that sub-Saharan Africa will probably expand 5.5 percent this year and 5.9 percent in 2012.
“Africa is indeed moving from vision to action,” South African Finance Minister Pravin Gordhan said in an interview in Cape Town today. “We see the current period as a new chapter that is opening up, which is characterized by greater interest in the African continent.”