African Economies Are Through the Worst of Downturn, AfDB SaysBy
Economies are resilient, growth seen accelerating: Adesina
Nigeria, Angola economies knocked by lower oil prices
African economies are probably through the worst of their downturns and growth should accelerate next year, driven by investments in infrastructure and attempts to diversify from commodities, according to the African Development Bank.
The continent’s growth rate may be around 3.5 percent this year, rising to 3.7 percent in 2017 and 4.2 percent in 2018, Akinwumi Adesina, the AfDB’s president, said in an interview in New York on Tuesday.
“We have a situation of economic headwinds,” he said. “But African economies are quite resilient. We have 19 countries growing at 3 to 5 percent and 21 countries growing at over 5 percent. Africa isn’t falling apart. The ‘Africa Rising’ story isn’t over.”
Africa gross domestic product expanded 3.6 percent in 2015, the slowest pace since 2011, according to the AfDB. OPEC members Nigeria and Angola, among the region’s three biggest economies, have been knocked by lower oil prices, with Nigeria heading for its first full-year recession since 1991. South Africa is barely growing, thanks in part to weak prices of raw materials such as platinum and gold.
Nations such as Ethiopia, Kenya and Ivory Coast, each of which is growing more than 5 percent, can teach others on the continent lessons, Adesina said.
“In all those countries, political stability has played a key role,” he said. “Most have significant amounts of foreign direct investment coming in. They have very strong macroeconomic stability. They’ve also given significant incentives to the private sector and are investing heavily in infrastructure. These are things other countries have to do.”
Adesina said that Nigeria, where he was agriculture minister until taking up the top position at the AfDB last year, should focus more on its non-oil industries.
“Mining has huge potential in Nigeria,” he said. “It’s a resource that needs to be tapped. Nigeria probably doesn’t need to spend its way out of the crisis. It needs to incentivize critical sectors to have a more balanced revenue base. That’s where the focus has to be.”