RBSC

Collapse

Announcement

Collapse
No announcement yet.

The largely untold story of Africas economic progress

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • The largely untold story of Africas economic progress

    Its a pity how few times we see stories on promising news from Africa.

    I understand that generally news goes after the spectacular story and this is just boring economic growth, but I am sure that with the stories of Darfur, Zimbabwe and more recently Kenya, most people would believe that Africa is as chaotic, war-torn and poverty-stricken as it has ever been, when that is simply not the case.

    Nigeria, as always, is the massive diamond in the rough. If they are able to maintain a relatively stable environment and continue to make progress with thier massive corruption problems (aided and abetted by the multi-nationals) then they could be among the top economies of the world in our lifetime.
    --------------------------------------------------------------------

    Africa Growing Rapidly, But Faces Risks
    By Calvin McDonald and Paulo Drummond
    IMF African Department

    Sub-Saharan Africa grew at a healthy pace in 2007, and the region is now enjoying its highest growth rates in decades. Real GDP expanded by about 6½ percent, fueled by growing oil production, and rising domestic investment and productivity. Solid global demand for commodities, greater flows of capital to Africa, and debt relief have helped lift growth.


    Strengthened macroeconomic policies and years of structural reforms have begun to bear fruit. Moreover, armed conflicts and political instability have become less frequent. As a result, not only have investment and growth increased, but income volatility has fallen to near-30-year lows. Not surprisingly, real per capita income is improving, although fragile countries continue to lag behind. Despite double-digit food price inflation in several countries in 2007, inflation on average has been held to the 6-9 percent range. Some countries, including some of the continent's leading reformers, that no longer need IMF financial assistance are, nevertheless, committing to sound policies through the Fund's Policy Support Instrument.

    Sub-Saharan Africa is also witnessing an increase in financial flows from emerging creditors, particularly China, which are stepping up assistance to the region largely in the form of project assistance and export credits.

    Financial market turbulence

    The global financial market turbulence has, to date, had a limited impact on sub-Saharan Africa. However, countries with more globally integrated financial markets, such as South Africa, experienced some increase in sovereign spreads and volatility in their foreign exchange and stock markets.

    In South Africa, an additional factor at play may have been the realization that bottlenecks in energy supply could constrain future growth. But, by and large, tighter credit conditions have not materialized.

    Prospects for 2008

    Global economic growth is expected to slow to 4.1 percent in 2008, down from 4.9 percent in 2007, with the slowdown in advanced economies offset somewhat by growth in emerging markets and developing countries. GDP growth for sub-Saharan Africa is projected at 6½ percent, with growth in oil exporters expected to accelerate to slightly less than 10 percent and that in oil importers to taper off at 5 percent. Inflation is expected to remain below 8 percent for the region, assuming macroeconomic policies hold firm. Unless policies change, Zimbabwe is expected to continue facing hyperinflation.

    Despite sound fundamentals, the region faces risks. Inflationary pressures arise mainly from oil prices, which are expected to increase by more than 20 percent this year compared with the average price in 2007. If oil prices were to rise to $100 a barrel in 2008, rather than the $75 projected in the fall World Economic Outlook, GDP growth would be reduced by 0.2-1 percent in the region, depending on countries' production structure and energy intensity.

    However, the behavior of other non-oil commodity prices will be crucial to the growth outcome. If high oil prices are accompanied by a stronger slowdown in major commodity importers, sub-Saharan Africa's exports would be hard hit. It is estimated that, for every 1 percent decline in global GDP growth, the region's GDP growth will decline by about ½ percentage point. If the current turbulence in global financial markets leads to a reversal of portfolio flows, this would also hurt growth in a few countries.

    The region also faces internal risks. Conflicts still ravage the Darfur region of Sudan and the Horn of Africa, and the situation remains fragile in the Democratic Republic of Congo. Post-election violence in Kenya is likely to reduce growth in that country, and neighboring countries could also be affected—for example, through interruptions to transit routes. The unrest in Chad also has implications for neighboring countries.

    Vulnerability varies

    Many countries are less exposed to shifts in global economic conditions than they were in the 1990s. Smaller current account and fiscal deficits, lower inflation, lower debt levels, increased foreign reserves, and strengthened policy frameworks have all helped make the region more resilient to external shocks. But while many countries have become more resilient to shocks, vulnerability varies significantly, and the region would still be affected by a pronounced global slowdown and a deterioration in its terms of trade.

    In countries with a flexible exchange rate regime, a forward-looking easing of monetary policy could help mitigate the output response to a negative demand shock. To the extent that the slowdown is temporary, countries with comfortable foreign reserves could use reserves to smooth shocks. In some countries the policy response may entail a more depreciated exchange rate to rebalance growth. A permanent shock, however, would require a real exchange rate adjustment.

    Countries with a sustainable fiscal position may have room for countercyclical fiscal policy and could let their automatic stabilizers operate. But countries without this room may have to offset at least part of the effect of automatic stabilizers. The degree of fiscal easing should take into account the level of public debt; to the extent that discretionary action is taken, it should be temporary.

    In several countries, especially oil exporters, the challenge will be to maintain macroeconomic stability in the face of strong foreign exchange inflows. Countries should cast spending and saving decisions in a medium-term framework that takes into account long-term fiscal sustainability. A strengthened public financial management system and institutional reforms in budgeting and project implementation would help ensure that expenditures are growth-promoting and poverty-reducing.
    .
    "‎It is easier to build strong children than to repair broken men" - Frederick Douglass

  • #2
    this is a spectacular story...

    Infidelity does not consist in believing, or in disbelieving; it consists in professing to believe what he does not believe. Thomas Paine

    Comment


    • #3
      Nigeria GDP growth rate


      2003 3.00 %
      2004 7.10 %
      2005 6.20 %
      2006 6.90 %
      2007 5.30 %
      2008 6.30 %

      Imagine if them can get some stability in the Delta oil region and make the people feel like they are getting some benefit from the resources that are making many govt officals and multi-nationals filthy rich.
      "‎It is easier to build strong children than to repair broken men" - Frederick Douglass

      Comment


      • #4

        Nigeria, as always, is the massive diamond in the rough. If they are able to maintain a relatively stable environment and continue to make progress with thier massive corruption problems (aided and abetted by the multi-nationals) then they could be among the top economies of the world in our lifetime.
        According to a co-worker, Nigeria will never have a stable environment until they purge themselves (by force) of the crooks that are running their country. He believes the only way they will solves their problems is through blood letting, and his people fought the civil war at the wrong time in the 60s.

        He recommends African countries be split up into nations based on tribal heritage, and he sees that as the only way his people can progress. A lot of us in the west don't realize that many Africans do not respect their national boundaries, but are only loyal to people in their own tribes. The British, French & Portuguese created these arbitrary international boundaries that includes tribes that had nothing in common with each other, and that has created many of the problems we see in Nigeria, Rwanda, Kenya etc.
        Winning means you're willing to go longer, work harder, and give more than anyone else - Vince Lombardi

        Comment


        • #5
          The artificial borders is definately one of the biggest problems created during the colonial period. The problem is how to re-create them without setting back the region another 40 years due to bloodshed.

          Good leadership can overcome some of those outcomes , but good leadership has been hard to come by in Africa. I saw a presentation by a Ghanian economist who said there have been over 200 heads of state in Africa since the 1960s and nobody can name more than 10 good ones.
          "‎It is easier to build strong children than to repair broken men" - Frederick Douglass

          Comment


          • #6
            Dem need a true leader.
            Winning means you're willing to go longer, work harder, and give more than anyone else - Vince Lombardi

            Comment


            • #7
              To be fair though they did lose a few during the struggles who could have made a big difference. Who knows what the Congo would be today if Lumumba was not killed and Mobutu was not empowered by external forces.
              "‎It is easier to build strong children than to repair broken men" - Frederick Douglass

              Comment


              • #8
                Den need fi chill wid dem scam artists!


                BLACK LIVES MATTER

                Comment


                • #9
                  That is one of the major growth industries!

                  You ever see the investigative report where they went to Nigeria to see how the scam artistes operate? Is some major operations with dozens of employees that some of them have.
                  "‎It is easier to build strong children than to repair broken men" - Frederick Douglass

                  Comment

                  Working...
                  X