There is little risk the political crisis in North Africa could spread to sub-Sahara Africa, but escalating oil and food prices are the main worry.
There is little risk that the political crisis in North Africa could spread to the sub-Sahara region, but escalating oil and food prices are the main worry, Donald Kaberuka, President of the African Development Bank said on Monday.
Anti-government protests have gripped North African countries such as Libya, Tunisia and Egypt, spreading to Bahrain as masses seek to unseat decade-old regimes.
“I don’t see copy cat events in sub Saharan Africa,” Kaberuka told Reuters in an interview.
“The thing to worry about more is if the oil and food prices continue going north with the kind of urbanisation we have there could be issues of managing social tensions in many of our cities,” he said.
Oil prices have risen to above $100 a barrel, raising worries that food prices could climb too. In 2008 international oil prices rose to above $140 and food prices climbed and led to protests in many countries around the world.
Indeed, inflation is starting to creep up in many African countries, with policymakers citing food as the main culprit.
Food security was also a “serious problem” and the development bank would invest in agriculture-related infrastructure to support farmers, Kaberuka said without giving more details.
North Africa could boost confidence
Kaberuka said, if anything, the North African crisis had potential to foster democracy on the continent and raise investor confidence.
“I think the events in North Africa will create more confidence for the investor because suddenly you have more political openings, you have greater transparency.”
“In the long term I think it will boost investor confidence. You will get conditions for longer term stability,” he said.
Kaberuka said the sub-Sahara region’s economy would grow by 5,5% this year but this was not enough.
“Growth is getting closer to pre-crisis levels. What Africa needs is not five and a half, it is 7% and we need a sustained 7%,” he said, adding high commodity prices will support growth in the region.
Kaberuka said elections in various countries were also a worry. Nigeria, Zimbabwe, Zambia and the Democratic Republic of Congo are among the nations that will go to polls in 2011.
“The other big risk in Africa is that we are having 17 elections. Often these elections do not necessarily immediately lead to stable conditions,” he said citing Kenya and Côte d’Ivoire
Most countries will be voting in national elections while others, such as South Africa will vote for local government.
A political stalemate over the disputed November poll has plunged Côte d’Ivoire, the world’s top cocoa grower into violent turmoil that has killed about 400 people.
In Kenya, about 1 300 people were killed and more than 300 000 displaced by post-election violence in late 2007 and early 2008, which hurt East Africa’s largest economy.—Reuters