/ 20 September 2011

African growth to exceed 5% in 2011-12, says IMF

While SA's growth is forecast at a more modest 3.4%, the IMF says it expects the economy of sub-Saharan Africa to grow by over 5% in the year ahead.

While SA’s growth is forecast at a more modest 3.4%, the IMF says it expects the economy of sub-Saharan Africa to grow by more than 5% in the current financial year.

The economy of sub-Saharan Africa will grow by more than 5% this year and next as the region posts a “solid” performance, the International Monetary Fund said on Tuesday.

The IMF meanwhile projected South African growth of 3.4% and 3.6% in 2011 and 2012, respectively.

It marks a recovery from (negative) -1.8% in 2009 and (positive) 2.8% last year.

The growth in South Africa will be driven by private consumption and revived investment, supported by low interest rates and the renewal of mining licences, the IMF said.

In its latest outlook the IMF said sub-Saharan growth would reach 5.2% this year and 5.8% in 2012.

“The SSA region is showing solid macroeconomic performance, with many economies already growing at rates close to their pre-crisis averages,” said the forecast.

“The global slowdown has not significantly affected the region thus far, but downside risks have risen,” it said.

The figures have been revised down slightly from June however when the forecast stood at 5.5% and 5.9%, respectively.

Growth in the region dropped to 2.8% in 2009 due to the economic crisis but stood at 5.4% last year.

The IMF said most of the region’s low-income countries had been largely shielded from the global financial crisis “owing to their limited integration into global manufacturing and financial networks.”

Oil exporting countries such as Nigeria and Angola can hope for an average 6% growth this year, rising to 7.25% in 2012, despite lower than projected oil prices.

The forecast reflects the strength in domestic public investment spending in the countries, the IMF said.

Ghana with its newly found oil wealth can expect growth of 13.5% this year, while Côte d’Ivoire, recovering from the months-long violence that followed its November elections, received a negative forecast of -5.8%.

The IMF said it expected a return to regular economic activity in Côte d’Ivoire in 2012 with a net growth rebound of 8.5%. — AFP